http://nyti.ms/fVo5XX
Netflix could have lost its place as a video distribution market leader if they had failed to invested in a streaming video distribution model, much like Blockbuster lost its place as a leader in video disruption to a mail distribution, disruptive innovation developed by Netflix. Currently Netflix is a front-runner in streaming video technology and distribution. They managed to innovate from with and change their mail distribution model rather than being overtaken by an outside competitor. A key reason for this is the way they envision the goal of their business: “Reed Hastings, the chief executive and co-founder, had always thought of Netflix as an entertainment distribution service rather than a mail-order company.” Looking at the big picture of bringing videos to consumers, rather than myopically focusing on the process by which they achieved that goal helped inspire innovation from within.
3 replies on “Netflix’s Big Picture”
Thanks for the perspective! I’ve been a Netflix customer for several years and had forgotten that (at one time) their delivery service was “out of the box.” It’s interesting to think of their “entertainment distribution service” as a disruptive innovation.
I think it’s a great point that Netflix’s success can be tied to its steadfast attention to its value proposition and the big picture. It is all too easy to lose sight of such things and for an organization to veer away from what is most crucial. The big picture is abstract, and details are comforting in their concreteness. One aspect of being successfully innovative is to only be concerned with such details of process and implementation as they support the larger goals of the organization and the mission at hand.
It’s interesting to see that the streaming media subscription model is beginning to take hold in other industries, as well. OnLive, a California-based company, just introduced a similar product for video games in which users can subscribe to unlimited gaming use for a monthly flat fee.
OnLive and Netflix share a key challenge. They are having trouble getting their hands on the newest and most popular titles for their streaming service. Time will tell how serious this barrier will be for the companies’ long term success.
full article: http://blogs.wsj.com/digits/2010/12/02/onlive-unveils-netflix-like-plan-for-games/?KEYWORDS=netflix