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Is Netflix a True Disruptor?

download (1)The term “disruptor” gets thrown around with abandon these days, but there are very few companies who actually qualify. A fascinating new article from The Harvard Business Review holds up Netflix as a true disruptor in its industry.

The article, which is definitely worth a read, holds up Netflix as a disruptor because it didn’t immediately go after its largest competitor, Blockbuster, which would have been the obvious choice for many companies. Instead, Netflix started out much more niche and slowly grew to compete with—and eventually overtake—the market leader.

From the article:

“For example, when Netflix launched, in 1997, its initial service wasn’t appealing to most of Blockbuster’s customers, who rented movies (typically new releases) on impulse. Netflix had an exclusively online interface and a large inventory of movies, but delivery through the U.S. mail meant selections took several days to arrive. The service appealed to only a few customer groups—movie buffs who didn’t care about new releases, early adopters of DVD players, and online shoppers.
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If Netflix had not eventually begun to serve a broader segment of the market, Blockbuster’s decision to ignore this competitor would not have been a strategic blunder: The two companies filled very different needs for their (different) customers.”

What do you think, Insiders? Netflix and Blockbuster’s current conditions (and existence, or lack thereof) would seem to prove the rightness of this theory.
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Are there any other true disruptors in the home entertainment biz? What about Redbox?

[via The Harvard Business Review]

7 Responses to “Is Netflix a True Disruptor?”

  1. Visitor [Join Now]
    Dano-Five0 [visitor]

    NetFlix is the way to go…
    And will be for years on end…..
    I have three out in the mail & the streaming deal.
    For $25.00 a month. I get 19 -21 movies a month in the mail.
    And all I can watch online.. Along with my Hulu + And over the air TV.. 69 Channels. I’m paying less then $40.00 a month. And have more then I can watch..

  2. Visitor [Join Now]
    Vernon Dent [visitor]

    As Shane mentioned the flavour of the month term “disruptor” is overused.

  3. Member [Join Now]
    Captain Betty [captain-betty]

    I think of Netflix as a true innovator. They didn’t set out to take someone down, but through innovation, service and value – took away market-share and customers, thus starving their competitors; catching them off-guard and scrambling to catch up and retain customers – and stay relevant. 10yrs from now we’ll see Netflix as the grandfather of how we currently consume media content.

  4. Visitor [Join Now]
    Danofive0 [visitor]

    The thing is…. People are sick of paying up the kisser for channels they don’t watch. And all that bit the Cable Co’s push on you.
    The TV & Cable Co’s need to wake up…
    And start letting you pick what you want. And pay only for that..
    They can do it.. They just don’t want to..
    I cut the coed years ago. And don’t miss a thing.
    NetFlix is King.. And will be for a long long time. They just keep getting better.
    And at a very good price..

  5. Visitor [Join Now]
    docsantos51 [visitor]

    We quit cable years ago because we couldn’t justify the expense compared to free antenna tv and now with the 4 major networks (NBC, CBS, ABC, FOX), the CW, & about 15 Spanish language channels; we even watch major boxing matches on TV-AZTECA (e.g. all Paquiao fights including the “run-away” fight with Mayweather, for free!). We used to do Redbox, then Netflix, but we found those to be latent in viewing current movies. There are a few “free preview viewing” websites on line, some even a few days after theater release. These have pop-up advertising in-between movies; but what do you expect for free.

  6. Member [Join Now]
    Brice [bricedm]

    Another disruptor (though with less influence than Netflix) would be TiVo. Though there were (and are) other DVR manufacturers, they brought it into the mainstream and changed the way that people watch television.

  7. Member [Join Now]

    If I have Amazon Prime (which I pay 95.00 per yr), do I get Redflix also free?