Explain the business model followed by Netflix.

Answer 5(c) Netflix follows the business model of "the subscription model". Mobile payments continue to rise in popularity and consumers are trending towards a more simple hassle free kind of shopping experience. These trends are leading towards explosive growth in subscription based services that customers can easily set up and then not worry about knowing they will receive their product or services every month. The other example for this model user is "dollar shave club" that is one of those simple subscription services that made it much easier for men to not worry about running out of razors and save money. Add in some crazy well message commercials with hilarious spokesperson and you have a brand who continues to double and even triple revenues annually. The business model provides an optimal balance of value to both the start-up and the customer. It is simple and convenient for customers and take a lot of thinking out of the purchasing process. Customers know they will receive their product every month around the same time and don't have to worry about pre orders and know they will get a set, flat rate that will stay within a budget. On the start-up end the value lies in being able to predict revenues through recurring sales which is incredibly advantageous for a company's valuation. This enhances the saleability of the company, increasing the attractiveness to potential VCs (venture capitalists) and buyers and often leads to valuations up to 8 times that of a similar business with little recurring revenues.