Netflix – DVD Rental to Streaming: A Masterclass in Flexibility

    Netflix reinvented itself twice — from mailing DVDs to streaming to producing its own content — years before the market forced it to. Here's the full story, and what it teaches about Flexibility, Trait #7 on the Winning Kite.

    Netflix – DVD Rental to Streaming: A Masterclass in Flexibility

    Netflix – DVD Rental to Streaming: A Masterclass in Flexibility

    In 1997, Netflix was a company that mailed DVDs to your house in a red envelope. Twenty-five years later, it is a global entertainment giant that has changed how the entire world watches television — and it got there not by resisting change, but by leading it, twice, before anyone forced its hand. In Stars at India Inc., I use Netflix as the clearest case I know of Type A behaviour — the rarest and most valuable kind of professional response to change. This is that story, told in full, and what it means for you on Monday morning.

    In short

    Where this sits on your Winning Kite

    Flexibility is Trait #7 on the EQ — left — side of your Winning Kite (KITE Leadership Framework). EQ traits govern how you feel about yourself and how you handle your own internal states — and nothing tests that more than uncertainty. A kite only rises when EQ, RQ and PQ are in balance; a professional with brilliant technical skill (PQ) but zero flexibility (EQ) still gets left on the ground when the wind changes direction, exactly like the companies in this story.

    The Red Envelope Era

    Start at the beginning. Netflix launched in 1997 as a DVD-by-mail rental service. You picked movies on a website, a red envelope arrived in your mailbox a day or two later, you watched, you mailed it back, the next one arrived. No late fees, no driving to a store. For its time, that alone was a genuine innovation — it dismantled the late-fee-driven business model that had made Blockbuster the dominant video rental chain in America, with thousands of stores and a business built entirely around walking in, browsing shelves, and paying penalties if you were late returning a tape.

    For years, DVD-by-mail was Netflix's entire business. It worked. It grew. By most measures, Netflix could have kept mailing red envelopes indefinitely and remained a comfortable, profitable, mid-sized company. That is exactly the point in every organisation's life where Type C thinking sets in: "This works. Why change now?"

    The First Reinvention: Streaming

    Netflix didn't wait for DVD rental to become unprofitable. It didn't wait for a competitor to launch streaming first and steal its customers. While the mail-order business was still healthy, Netflix's leadership looked at where broadband internet was heading, looked at where consumer patience for waiting a day for a DVD was heading, and made a decision that from the outside looked almost reckless: they built a streaming product that would eventually cannibalise their own core business.

    Think about how unusual that is. Most companies protect their cash cow. Netflix pointed a gun at its own most profitable division and pulled the trigger — because its leadership understood something every Type A professional understands instinctively: if you don't disrupt yourself, someone else will, and they will do it on their timeline, not yours.

    Streaming launched in 2007. It was clunky at first — limited content, patchy internet speeds, a learning curve for customers used to physical discs. Netflix absorbed that discomfort deliberately. This is the emotional core of flexibility that I keep coming back to in the book: it is not about having a clever strategy on paper, it is about tolerating the anxiety of the in-between period where the old way is dying and the new way isn't fully working yet. Most people — and most companies — cannot sit in that discomfort. Netflix did.

    Blockbuster: The Type C Mirror Image

    Now place Blockbuster next to this story, because the contrast is the entire lesson. Blockbuster had more stores, more brand recognition, more cash, and — this is the part people forget — the opportunity to buy Netflix outright in the early 2000s for a fraction of what Netflix is worth today. Blockbuster's leadership looked at Netflix's DVD-by-mail model and dismissed it. They believed their thousands of physical stores were an unshakeable advantage. They believed customers would always want to browse shelves.

    They were Type C: resistant to change and refuse to adapt to new situations. Stubborn and unwilling to consider new ideas or approaches. That is not a personality flaw unique to a boardroom in Dallas — it is the exact same voice I hear from professionals every week: "I've always done it this way." "This new system is complicated." "I don't like uncertainty." Blockbuster said all three, at scale, with shareholder money. By 2010, Blockbuster had filed for bankruptcy. Netflix, the company it once had the chance to buy for pocket change, was already streaming to millions of households and about to become the biggest entertainment company most people had never imagined possible in 1997.

    Kodak invented the digital camera and refused to embrace it, fearing it would hurt film sales. Nokia dominated mobile phones and hesitated when smartphones arrived, ceding the market to Apple and Samsung. Yahoo failed to innovate and lost its position to Google and Facebook. Videocon, a household name across India, could not keep up with newer brands and eventually collapsed. Every one of these was Type C. Every one of them had the money, the market position, and the warning signs. None of them moved in time.

    The Second Reinvention: From Distributor to Creator

    Netflix didn't stop at streaming. Having proven it could reinvent its distribution model once, it did it again — this time reinventing what kind of company it even was. It stopped being purely a platform that licensed other studios' content and started producing its own: original series, original films, an entire content studio built inside what had started as a mail-order DVD business.

    This is Type A behaviour at its most complete: change not as a one-time survival tactic but as a repeatable muscle. The same company that once mailed you a physical disc now commissions, produces, and globally distributes its own television — competing directly with traditional Hollywood studios that have existed for a century. Today it is, in the plain words I use in the book, a global entertainment giant.

    Why This Isn't Just a Silicon Valley Story

    I bring Netflix into a book largely about Indian workplaces because the underlying pattern is universal, and I see it every week in the companies I train. Consider India Post — once the single most important institution in the country for sending parcels and letters, with a branch in every district and taluka. When private courier companies like Blue Dart, DTDC, and FedEx arrived offering speed, reliability, and convenience, India Post did not respond with Netflix's urgency. It lost enormous market share, not because it lacked reach or resources, but because it lacked the emotional readiness to treat the new competition as a signal to reinvent rather than an inconvenience to outlast.

    I also think of the IT professionals I've trained who built strong careers on C, C++, and Java, and who resisted when Python, AI, machine learning, and cloud computing became the industry's new language. "I'm comfortable with Java," they told me. "Why should I learn Python now?" Some of them are still saying that. Meanwhile, younger colleagues who treated the shift the way Netflix treated streaming — as an opportunity to move first — are the ones getting the best projects, the promotions, the recognition.

    And I think of Ramesh, a story I tell at length in the book: fifteen years at the same manufacturing plant in Pune, an expert on every paper-based process, who resisted his company's move to a paperless ERP system so hard that his own fifteen years of experience turned from an asset into a liability. His manager's words to him during a poor performance review could be said to any Type C professional in any industry: "Your technical knowledge is excellent. But the company is moving forward, and you're still standing in the same place."

    The Three Types, One More Time

    Every organisation — Indian or American, a five-person startup or a multinational — sorts its people into the same three buckets when change arrives.

    TypeBehaviourExample
    Type CRefuses to change, stays until it's too lateBlockbuster, Kodak, Nokia, Yahoo, Videocon
    Type BChanges only under pressure, reactive not proactiveThe employee who learns new software only when told they'll lose their job
    Type AEmbraces change proactively, before it is forcedNetflix, Apple, Amazon, Amul, Byju's

    Notice something important: Type B professionals survive. They keep their jobs. But they never become stars, because they are perpetually one step behind, spending their energy catching up rather than leading. Netflix's genius across both reinventions was that it never let itself become Type B. It didn't wait for streaming numbers to prove DVD rental was dying. It didn't wait for a competitor's hit original series to prove content creation was the next frontier. It moved while it still had the choice, not after the choice was made for it.

    The Emotional Root of Flexibility

    Here is the part that separates my chapter on Flexibility from a business-school case study: adaptability is not primarily a strategic skill, it is an emotional one. In my book The Winning Edge and in my video series, I talk about the six emotional needs that drive human behaviour, and one of the strongest is the need for certainty. People — and by extension, the companies people run — who have a high need for certainty crave predictable routines and feel unsafe outside their comfort zone. When change arrives, uncertainty feels like pain, and to avoid that pain, they resist. They dig their heels in. This is precisely what happened inside Blockbuster's leadership, and it is precisely what happens inside any professional who says "I've always done it this way" when a new system, city, or job description shows up.

    Daniel Goleman's research on emotional intelligence makes a similar point: self-confidence is essential for adaptability. When you trust your own capacity to learn, uncertainty stops feeling like a threat and starts feeling like a challenge worth taking on. Netflix's leadership clearly had that confidence at an organisational level — the confidence to dismantle their own most profitable product because they trusted they could build something better on the other side of the disruption.

    What Netflix Teaches You, Specifically

    You are not running a streaming company, but the pattern applies directly to your career:

    1. Don't wait for the crisis

    Netflix built streaming while DVD-by-mail was still profitable. Apply this at your desk: learn the skill, the software, the adjacent function before your manager tells you it's mandatory. The professional who says "let me explore management software too" instead of "that's not what I was hired for" is behaving exactly like Netflix in 2007.

    2. Treat your own comfort zone as the risk, not the safety net

    Blockbuster's stores felt like an unshakeable advantage right up until they became a liability. Whatever skill, process, or role currently feels like your safety net is worth stress-testing honestly: is it actually protecting you, or is it Ramesh's fifteen years of paper filing — expertise in something the world is quietly moving past?

    3. Reinvent more than once

    Netflix didn't stop after streaming. The second reinvention — into original content — is the harder lesson, because it's tempting to treat one successful adaptation as proof you're now "done" changing. Flexibility isn't a single pivot. It's a standing posture.

    4. Change your perception before you change your plan

    You cannot stop change arriving — new ERP systems, new job descriptions, new cities, new priorities every quarter. But you can change how you interpret it. Ask yourself what Netflix's leadership effectively asked itself: how can I adapt to this, what can I learn from this, how can this help me grow? The moment your perception shifts, adaptation stops being a fight and starts being a plan.

    If you want to see this same principle worked out in an Indian professional's own career — not a company but a person, transferred city to city without complaint — read the story of Mr. Rajesh, the adaptable business development officer, in the companion piece to this one. And for the full picture of how Flexibility fits alongside the other 24 traits on the EQ side of the kite, see the complete Flexibility chapter breakdown.

    Be Like Netflix

    Life, from birth to death, is full of change. Our bodies change, our relationships change, our companies change. The professionals — and the companies — who understand this reality and face it with courage instead of resistance are the ones who move ahead. Netflix started as a company that put DVDs in envelopes. It is now one of the most valuable entertainment companies on earth, not because it got lucky twice, but because it treated its own comfort as something to outgrow, not something to defend.

    Change is not your enemy. Resistance is. Be like Dhoni. Be like Netflix. Be like the seasons — constantly adapting, constantly renewing.

    If you're building a culture where your team responds to change the way Netflix did rather than the way Blockbuster did, this is exactly the kind of shift I help leadership teams make through Signature Corporate Training Programs and our full suite of corporate training topics. If you'd like to talk about bringing this to your organisation, get in touch.

    Bring These Ideas to Your Team

    Avinash Chate turns the traits in Stars at India Inc. into live leadership & emotional-intelligence workshops. TEDx speaker · 11+ yrs training Army, BRO, RBI, BARC, JSW & 1000+ leaders.

    ✅ Thanks! Avinash team will reach out within 24 hours.

    '}).catch(function(e){f.outerHTML='

    Something went wrong. WhatsApp +91 8793630001

    '});return false;">Select ServiceKeynote / Motivational SpeakingLeadership Development TrainingTeam Building WorkshopManager DevelopmentEmployee TrainingBook Avinash Now →

    Or WhatsApp directly: +91 87936 30001

    Work with Avinash Chate

    Avinash Chate

    TEDx Speaker · Founder, The Future Corporate · Author of Stars at India Inc.

    Avinash has trained the Indian Army, BRO, RBI, BARC, JSW Steel and 1000+ corporate leaders across India. His work focuses on leadership, emotional intelligence and behavioural training rooted in Indian values and modern business needs.

    Frequently Asked Questions

    What is the Netflix example in Stars at India Inc. about?

    It is the story of how Netflix moved from mailing DVDs in red envelopes to streaming video, and then to producing its own original content — used in the book to illustrate the Flexibility trait, one of the 25 traits on the EQ side of Avinash Chate's Winning Kite framework.

    Why does Avinash Chate use Netflix instead of an Indian company for this trait?

    Because Netflix's journey is a clean, three-stage case of proactive change — DVD rental to streaming to content creation — that mirrors what he calls Type A behaviour: evolving before the market forces you to. He balances it with Indian examples like India Post, Mr. Rajesh the adaptable BDO, and Videocon in the same chapter.

    What is the difference between Type A, Type B and Type C professionals?

    Type C professionals refuse to change and eventually get sidelined. Type B professionals change only under pressure, once a job or deadline forces their hand. Type A professionals embrace change proactively, the way Netflix did — before streaming became a threat, not after.

    How can I build flexibility like Netflix showed, in my own career?

    Start by recognising your own need for certainty, then take small proactive steps: learn a skill before your role demands it, volunteer for change rather than waiting to be assigned it, and treat every shift in priority as a data point about where the market is heading, not as an inconvenience.

    Related Articles by Avinash Chate

    Avinash Chate services

    Corporate Trainer in Pune · Top Corporate Trainers in Pune · Leadership Trainer in Pune · Top Leadership Trainers in Pune · Team Building Trainer in Pune · Top Team Building Trainers in Pune · Motivational Speaker in Pune · Top Motivational Speakers in Maharashtra · All service locations

    ← Back to all articles · Book Avinash Chate

    By Avinash Chate — Maharashtra’s #1 Corporate Trainer & Motivational Speaker. .