Netflix Inc.'s online DVD rental and delivery business is thriving, but the company isn't banking on that alone to keep its balance sheet healthy. As The Wall Street Journal reports, the company is partnering with technology firms to
build its video streaming business, which allows subscribers to download content from the Web. Netflix partners -- including LG Electronics Inc., Microsoft Corp. and Roku Inc. -- will embed Netflix download software into their consoles and players.
Investing in its streaming operation as its rental business booms is smart. It's also another example of how companies are using strategic alliances to generate growth. As we've noted recently, managing those partnerships over time, as objectives shift and other opportunities arise, is a challenge. We talked to Scott Wilson of Deloitte Research recently about how companies can construct lasting partnerships. His best advice? Make the motivations and objectives of the partners transparent, include governance mechanisms in the deal, establish trust early and seek out partners with comparable learning capacities.
For more from Scott, check out
this edition of Inside The Deal. -
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