Netflix, Inc. (NASDAQ:NFLX)’s first-mover advantage has allowed it to gain significant market share. More important than market share, however, is the data Netflix has gathered on customers. That data allows the company to customize recommendations, drawing customers further into the experience. Best of all, it allows Netflix to produce original, exclusive content tailored to customers’ interests. Finally, exclusive content deals such as the recent Dreamworks Animation Skg Inc (NASDAQ:DWA) agreement allow Netflix to further expand its subscriber base.
Netflix, Inc. (NASDAQ:NFLX) is a great example of a company that continues to succeed in spite of severe holdup risks. The takeaway for investors is to recognize the potential for holdup costs and find businesses that don’t have them or identify those that do have them and keep winning regardless.
The article What the NFL Can Teach You About Business originally appeared on Fool.com.
Jake Keator has no position in any stocks mentioned but would really like to see Smallville in Netflix’s streaming library. The Motley Fool recommends Amazon.com, DreamWorks Animation, and Netflix and owns shares of Amazon.com and Netflix.
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