Stephen Shapiro explains how Netflix's DVD subscription model, which charged by concurrent rentals instead of monthly limits, can work for service businesses. Freedom Boat Club uses this approach with unlimited boat access, and the same logic applies to consulting and advisory services.
Chapters
Although Netflix today is known for their streaming service, really where they started was with a DVD subscription service. And the way they did this was brilliant. They didn't charge you based on how many DVDs you actually received over the course of a month, but rather you could only have a certain number of DVDs out at any given time. So if you had a subscription that said, hey, you can have two DVDs out at any given time, they would send you two from your list and you could keep them for all 30 days and only watch those two. Or you could send one back and as soon as they receive it, they'll send you another one back. And this is brilliant because basically what they gave you was unlimited access to DVDs while limiting the number of outstanding DVDs. And I love this concept and I'm going to give you a product company that uses this concept. But I think it really could apply quite easily to service based businesses. The Freedom Boat Club is a boat club, but instead of renting a boat, you get unlimited access to all their boats. The only caveat is you could have two outstanding reservations. So you could have a reservation for Monday and a reservation for Friday. You couldn't reserve one for the next week until you used one. As soon as you used Monday, boom, you got another reservation and and you can reserve one more time. And I often think this would create a really interesting advisory service or consulting model.
