The original Netflix business model was clever. You would queue up the films you wanted. They would mail you a DVD of a film that you would mail back after watching. It was easy. There were no due dates and no overdue fees. All it required for them was to purchase DVDs and stock a warehouse with them, with little other overhead since once you purchase a DVD, you can rent it out as many times as you like. It is little wonder that these low overhead costs drove the brick-and-mortar Blockbuster out of business.
[Read more…]
