Companies should learn how to evolve from Netflix.

Over the past few years the landscape of home entertainment has been changing. As broadband internet access has found its way into households across the country the utilization of on-demand content is becoming commonplace.

Netflix, who we’ve criticized before and been pleasantly surprised by their response, has been really on top of capturing this next generation of home entertainment. In fact, it seems like they’ve secretly been waiting for this moment since the incarnation of their brand “Internet Flicks”.

When I first heard of Netflix I was in early high school, my friend’s parents had just signed up for this new service that delivered movies via mail. I was confused, how in the world did the name Netflix really correspond to mail delivery movies? Further, was it really worth waiting two days to get a movie when you could go to a local store and get it in 30 minutes? Well, as they say, the proof was in the pudding. As the internet boomed in the early 2000’s Netflix became a real time rival to those other rental services such as broke-ass-buster Blockbuster and Hollywood Video.

However, it wasn’t until this past year that I really started to respect Netflix as a company with vision. In fact, I find it almost creepy how well they’ve positioned themselves in today’s current home entertainment market.

I imagine the idea of on-demand content has to be terrifying to most rental services. With pay-per-view, Hulu, torrenting, and iTunes the idea of brick and mortar rental is on the way out. And while DVD mail delivery isn’t quite as dead as store rental it definitely has a limited lifespan.

Here’s where Netflix is different from a lot of companies. They recognized their business model was dying and instead of whining about it they acted. They didn’t whine about liscensing costs, they didn’t worry about not having a media center product. Instead they took their vision and started working. Giving their customers an opportunity to watch movies instantly on their PC’s for free. Hear that? I said FREE. By not expecting immediate returns on their investment they captured a substantial portion of the online steaming market share and the buzz around it.

It comes down to this. How many people would have been willing to pay an extra $10 a month to try online movie streaming? Maybe a few. How many were willing to try it for free? Everybody.

Netflix, whose name now seems surprisingly perfect for their service, is suddenly a leader in the online delivery world. Since they started delivering online content they’ve cut deals with a number of home media center device manufactures. Including Roku, a few Blu-ray players, and Microsoft’s Xbox. Further, they’ve bundled their online delivery with their plans at no additional cost (I imagine they make up some money by not having to use as much postage) and they’ve started adding HD quality (720p) content.

In essence, Netflix lined up their challenges, picked up a bat, and started knocking them out of the park one by one.

Now granted the battle for next generation content delivery isn’t over, but it seems clear that Netflix isn’t holding the losing hand. They’ve played their cards perfectly up to here and I can happily say that I’m a user of their service and it rocks.