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| Subject: Update: Applicable Lesson For A Variety Of Businesses— Reinvest While You Still Can | |
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Author: Dennis S. Vogel |
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Date Posted: 03:17:34 07/24/09 Fri In reply to: Netflix Victim 's message, "Netflix Victim needs more ideas & customers" on 15:50:11 06/30/07 Sat I hope it doesn’t seem like I’m rubbing salt in anybody’s wound. I found another article documenting Netflix’s success. With a booming business in streaming media, there's no stopping Netflix http://www.betanews.com/article/With-a-booming-business-in-streaming-media-theres-no-stopping-Netflix/1248388732 It’s a short article, so if I’d include all key points, I’d be republishing the whole article & I don’t have the copyright or permission to do it. I’m pushing the limits of Fair Use with the little I included below. Here are some excerpts: In case there was any doubt of the momentum Netflix has been able to build as video stores continue to cede market dominance to on-demand streaming and by-mail and kiosk-based rentals, the company today announced that it has 40% more subscribers, 21% higher revenue, and 22% higher profits than last year. "We believe that the inclusion of streaming in our service has broadened the appeal of Netflix and is driving growth...essentially, both Netflix and Redbox are growing at the expense of video stores." said Netflix CEO Reed Hastings in the company's earnings call this afternoon. "In our most highly penetrated market, of the San Francisco Bay area where 20.7% of households now subscribe to Netflix versus 9.1% nationally, the tech innovation factor around streaming is very high, and high-speed cable broadband is widely available. Because of all of that, growth in our subscribing households in the Bay Area is increasing at about 2% points per year. We believe the Bay Area is a leading indicator of Internet behavior elsewhere in America," Hastings said. My commentary (or extraordinary -tary): 9.1% nationally penetration is potentially highly profitable as long as a business is run wisely. But 9.1% nationally means there are 90.9% of households without a Netflix subscription. The fight isn’t over yet. Sometimes business fluctuates in cycles, other times there are aberrations. The title of an article tells almost the whole story of the article. Bad News for Hollywood’s Bottom Line: DVD Rentals Doing Better Than DVD Sales http://carpetbagger.blogs.nytimes.com/2009/03/02/bad-news-for-hollywoods-bottom-line-dvd-rentals-doing-better-than-dvd-sales/?pagemode=print Until people are comfortable with buying DVD/video tapes, rental businesses may do well if they’re marketed well. A vital business practice is reinvesting in your business from the beginning. (If you haven’t reinvested in your business, you can & should start.) In almost any business category, there will almost always be new technologies &/or knowledge available. If you let competitors get a head start, you may spend the rest of your business’s life struggling to catch up. You can’t afford to let competitors learn & implement things without doing what you can to keep up--whether it’s implementing best practices; installing & using technology or gaining more customers. When competitors are further along a learning curve than you are, you’re at a disadvantage. I know you won’t be able to match everything big competitors do. But you don’t have to match them. You can offset what they do by learning & implementing what makes your specific business stronger. Make your business & what you offer a superior (compared to big competitors) choice for people in a specific market niche. Netflix kept reinvesting to improve & expand. You don’t have to invest for expansion. You need to invest in improvements. You may need to do something like Robert Kiyosaki advises people to do. He advocates paying debts, but he emphasizes “Pay yourself 1st.” He means invest some money while you have some to invest. If you wait until you send out all of your monthly payments & use what you have left, you probably won’t have enough for investment. Pay your business something significant every month so you can reinvest in improvements. Invest in yourself by learning more & improving, then maintaining good health. Don’t make a mistake & figure a new way of doing business in your business category or a related category won’t affect you. Many former business owners disregarded what others were doing. Formerly successful business owners often hurt their businesses the most when they’re successful. They’re overconfident, so they ignore future changes & don’t invest money or investigate possibilities. A lot has been written & probably more will still be published about what business owners & executives should've paid attention to. You can either be a good example of doing something right or a good example of doing what’s wrong. What will be your historical legacy? Dennis S. Vogel A thriving business offer what competitors don't have. When a niche is big enough to be profitable for a small business & too small for a big business, small businesses can succeed. To help you succeed, I have free marketing advice & information here - http://www.thrivingbusiness.lakefield.net/ http://www.voy.com/31049/ [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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