what you can learn from Netflix’s strategy – WAU

If you don’t subscribe to Netflix, at the very least, you know what it is about. The brand is a symbol of the digital revolution, and has much to teach for every type of business. In this post, we will learn about the company’s trajectory and some of these lessons to be learned with Netflix’s strategy!

In the first quarter of 2019, Netflix reached 148.8 million subscribers worldwide. In the previous year, it became the best-rated media company on the market, worth about $ 152.3 billion, surpassing Disney.

It is likely that when you read this you will find these achievements impressive, and they really are. You may even believe that these resounding results are impossible for a small business.

But the truth is that Netflix was not always great. These results are the result of a brilliant strategy by the company, which in the past was underestimated by competitors.

Therefore, watching the example of this giant in the digital world will help you to be inspired and innovate in your business. In this post, you will learn the success story of Netflix’s strategy and have access to valuable lessons that you can put into practice in your business!

Get to know Netflix’s success story

Netflix was founded in August 1997, by Reed Hastings and Marc Rudolph. At the time, they offered a DVD rental service. But the company only became popular in 1999, when it started to rent DVDs in subscription format.

At that time, it was common to charge fees when a person rented a DVD and did not return it on time. Netflix revolutionized this market removing these fees and simplifying the entire rental process for customers.

At $ 20 a month, it was possible to form a list of films and receive 3 of them by mail. The customer could keep the DVDs at home for as long as they wanted.

As soon as he returned one of the DVDs, a new film from the customer’s list was mailed to his home, something that no one had thought of until then.

Long-term vision vs. short-term vision

Still in 1999, Amazon, which today has its own streaming services (called Amazon Prime, one of Netflix’s main competitors), offered $ 12 million to buy the company. The offer was declined.

Despite this, Netflix even made itself available to Blockbuster in 2000, which would have to pay $ 50 million to buy it.

Blockbuster barely considered the offer because it believed Netflix was part of a niche market. Interestingly, in 2010, Blockbuster filed for bankruptcy in the United States. Meanwhile, Netflix has begun its worldwide expansion process.

Streaming start

As you can see, Netflix was not founded as a worldwide streaming provider. The change of focus happened only in 2007, when the company reached the incredible mark of 1 billion rented DVDs.

You may ask yourself, “If the business was going well, what motivated this change on Netflix?” Some factors that we can highlight are:

  • the adaptation of the internet in the mid-2000s with an increase in broadband;
  • the growing popularity of YouTube (yes, that was an inspiration!);
  • DVDs and other stored media have become less popular than the Internet.

This all contributed to Netflix moving further away from renting movies on physical media and focus its strategy on offering streaming services.

Again, something that no one had explored before: a virtual catalog from which customers could comfortably select their favorite options and watch instantly.

Model transition errors

In 2011, Netflix started offering only streaming services and created a side business (called Qwikster), for the DVD rental business.

The idea was not well accepted by the public. This led to a loss of millions of subscribers and the situation needed to be corrected.

Humbly, Reed Hastings, Netflix CEO, publicly apologized. After a while, he took a step back, shut down Qwikster and DVD rental was incorporated into the domain dvd.com, which later became dvd.netflix.com.

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Netflix managed to be very clear about its target audience. Therefore, their productions focus people between 18 and 49 years old.

Of course, there are exceptions to every rule. Still, most of them are attractive programs for adult audiences looking for something specific. This made it possible for the company to work on its image in the market in the right way.

This Netflix strategy also helped her to find the right tone of voice to talk to her audience. This eliminated formality, made communication fun and brought the audience closer to the brand.

In addition, Netflix has created innovative ways to publicize the launch of its series. This made new products added to the platform even more attractive.

Another highlight is that Netflix’s strategy has a strong presence in the virtual world. It is where your audience shows interest and communicates.

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Original productions

Netflix’s first original production was “House of Cards”, launched in 2013. Since then, the company has created numerous original productions. This took Netflix’s strategy to a new level.

Now, they are not just a subscription model that depends on other broadcasters to have relevant content for their audience. The original productions were developed with the target audience of this multinational in mind, an excellent strategy from Netflix to attract and retain more and more subscribers to its platform.

Positioning in the midst of competition

Netflix’s strategy has made it a benchmark in the digital world and in offering streaming products. This causes it to end up dictating many of the rules of this market and to stand out among its competitors.

Today, most traditional TV channels already have an “on demand” application. However, the functioning of these platforms needs to be accelerated.

The flood of original Netflix content contributes (and a lot!) So that people’s way of consumption is less and less in the traditional way. Netflix’s strategy worked so well that today, she dictates the rules of the market and even is able to change some.

Important lessons you can learn from Netflix

So far you’ve seen how effective Netflix’s strategy really is, but having that knowledge is just the first step. Lessons must be learned and put into practice. See some of them!

Can’t get everything right

The loss of millions of Netflix subscribers in 2011 teaches a valuable lesson: your strategy will not always work. Midway mistakes will happen. So it is important to:

  • be aware of the things around you;
  • learn from failures;
  • take steps to resolve the problem;
  • don’t let that stop you from growing.

What would Netflix do if its CEO, Reed Hastings, decided that this was not a good time to focus on streaming services? After all, stopping offering DVD rental has caused a business downturn.

Netflix would hardly have become as well known worldwide as it is today. The error did not stop Hastings from thinking big and continuing to expand his business. So, learn from your mistakes and use your knowledge to keep growing.


Having original ideas is what will help you become a reference in the market. Paying attention to what other companies are doing is important and can give you good ideas of what to do to leverage sales.

That’s what Netflix did when watching YouTube. However, she was not obsessed with the way Google’s video platform works. They had the idea, adapted it for their business and managed to turn it into something original.

Once again, Netflix’s strategy showed the importance of originality when launching its own content. And again, this is what contributed to her dictating the rules of the market.

So, give real solutions to your customers. Don’t just offer the same as your competitor’s. Find your competitive edge and explore it.

Correct tone of voice

Netflix knows how to talk to its customers. Their business strategy identified the best language to attract and retain customers.

Therefore, it is easier to realize that communication is what will help you to attract more consumers. With that in mind, find out how your audience and persona converse.

Like Netflix, avoid maintaining formality. Being formal can even prevent you from making some mistakes. However, you are unlikely to get the attention of the right people that way.

Remember that you deal with people and that they are attracted to what is communicated in your language.


Netflix used creativity to create videos that appeal to its target audience. Another strong point is that the company looked for ways to be present where its subscribers are also.

It shows that you also need check where your target audience is present, identifying the main social networks he uses, for example, and using these spaces to intelligently advertise the services and products he offers.

This will help you to build an image for your company and to stand out among your competitors.

The mistakes and, mainly, the successes of Netflix’s strategy teach a lot about how it is necessary to take practical measures to grow the business.

Putting the lessons learned into practice will help you leverage your business and, who knows, also become a successful case like Netflix.

See how you can learn a lot about Netflix’s strategy? Want to see more about this subject? Discover now the biggest lessons we’ve learned from Nubank’s strategy!