I find the Netflix story completely compelling and I'm not even a customer.  After all, here's a business that, on the day it was started, knew it would die quickly if it didn't immediately begin to change.

In case you're not familiar, Netflix makes money by mailing DVDs to subscribers at their request.  After the subscriber watches the DVD (movies, games, etc.) they mail it back and receive a new one.  The company was founded on the premise that Blockbuster's business model was flawed; specifically related to their system of charging high fees for movies returned late.  From the start, Netflix was a commercial success and the company has experienced strong growth.

But Netflix's founder and CEO, Reed Hastings, knew from the start that a business that mailed content, in this case DVDs, would have a relatively short lifespan.  It would only be a matter of time until Netflix's customers would be able to experience the exact same content on demand, instantly and probably at a lower cost.  In other words, Netflix's "real" competition isn't Blockbuster or another DVD mailing service, it would eventually be the satellite, telco, cable or ISP.  More than likely it would be some combination thereof.

So even though the company generates over $1.3 billion in revenues, it is currently in the process of tearing itself down so that it can rebuild.  Imagine how painful that must be for the average Netflix employee.  There are no sacred cows here.  Instead, Netflix has accepted the reality that the skills that produced the first $1.3 billion would not be the same skills that produce the next $1.3 billion.  

What's unique about Neflix isn't their business situation, it's their acceptance of it.  All business models eventually die and are replaced by more efficient business models.  Sometimes this transition takes decades (steel, automobiles) while other times it seemingly happens overnight (fax machines, travel agencies).

After all, when is the last time you faxed your vacation plans to your travel agent?