to late fees and could rent as many videos as they wanted within a single month. Lastly, the
monthly subscriptionprovided consistent cash flow for the company while establishing a
single low price that customers could count on month after month.
Blockbuster tried too late to combat Netflix by eliminating its own late fees and introducing
its own all you can eat DVD subscription. Unfortunately, the Blockbuster response came too
late and the company never was able to overcome the advantage that Netflix had built up in
volume and convenience. Had Blockbuster seen the Netflix threat sooner, the company may
have made its own business model adjustments in a way that leveraged its vast retail
infrastructure in a way that Netflix would not have been able to compete with.
The Netflix Business Model Canvas
Alexander Osterwalder and Yves Pigneur, authors of Business Model Generation, have
developed the popular business model canvas. The canvas is described as ìa shared language
for describing, visualizing, assessing, and changing business models.î It's made up of nine
building blocks that help focus attention on key attributes of a business. I've attempted a
business model canvas for Netflix, incorporating different aspects of its business model that
apply to the DVD rental and video streaming products.