The NetFlix business model focused exclusively on the new DVD format technology.
Management had four main reasons for focusing on this specific segment of the home video market.
• DVD players were the fastest growing segment of the video player market. Because of the
rapid adoption of the new DVD technology, sales were forecast to grow at a 49% compound
annual rate over the next five years.2 Exhibit 4 provides a comparison of DVD player and
videocassette recorder sales during the first five years after their respective introductions.