Final answer:
Netflix leverages its data by using it to improve content recommendations for users, tailoring the viewing experience to individual preferences. This data-driven strategy has helped Netflix grow despite initial setbacks and the presence of other streaming and DVD renting alternatives.
Step-by-step explanation:
The student has asked how Netflix leverages its data asset as it transitioned from delivering physical DVD disks to providing streaming video content. The correct answer is option b. Netflix uses its data to improve content recommendations for its users. This data-driven approach allows Netflix to personalize the viewing experience, curate content that aligns with users' tastes, and predict future content success to refine their library and create compelling original programming. Therefore, the data acquired from subscriber interactions is not sold to third-party companies, nor is the company focusing on traditional marketing or outsourcing its data management.
Despite facing a strong reaction back in 2011 and competition from services like Vudu, Amazon Prime, Hulu, and Redbox, Netflix has experienced a substantial increase in subscribers over time. This evidences a shift in consumer preferences from physical DVDs to streaming video, reflecting the company's ultimate success in understanding and capitalizing on changing consumer behaviors and demand elasticity. As digital streaming technology continues to evolve, Netflix's continuing adaptation and data-centric strategy likely played a significant role in its growth and current market positioning among rivals offering close substitutes.