Netflix has been all over the news recently, as the entertainment streaming service with a base of 70 million subscribers announced it will extend its reach to almost every country in the world. The move doubles its potential market.
The Netflix business model has proven so successful that last year its stock was among the best-performing on the Standard & Poor’s stock index, rising 140 percent.
At first glance, it doesn’t seem as if Netflix has much to do with insurance. But take a deeper look. Netflix is responding to the disruption in the entertainment industry, an example of how a business can successfully ride the waves of consumer demand by delivering what they want, the way they want it. It’s an example of how creative life insurers can win in a changing marketplace by closely listening to what their customers want and need.
Here are the key elements that make Netflix successful:
- Technology. Taking full advantage of tech capabilities, Netflix delivers entertainment across all platforms, from traditional television to mobile apps, even gaming platforms like Wii and Xbox. This ensures customers can access products on any device they want, at any time—24/7.
- High-quality content. Thousands of movies and TV show episodes are available, including original content.
- Subscription business model. Netflix content doesn’t include advertising; it doesn’t have to. Billing is on a subscription basis, with a basic package starting at less than $10 a month. Since billing is automatic, those 70 million Netflix subscribers are a captive audience once they’re signed up.
And Netflix isn’t the only game in town. Google, Amazon and Spotify, among others, are all jostling for market share, along with legacy network and cable television.
The takeaway for insurance goes back to Accenture’s predictions on market disruption: we have to accept major change to give customers what they want, how they want it. The Netflix business model can be applied to insurance. The message is: provide great products and services, deliver them over all available platforms on a 24/7 basis, and shift buyers to a periodic payment model scaled to the products they want.
Do you think the Netflix model could work for life insurance? Why or why not? I’d love to hear your opinion.