Prep
Distruptive Innovation
Netflix Inc.
Netflix story starts with
- DVD by mail
- Recommendation system to combat low diversity
- Streaming
- Content creation
- Global expansion
- Diversification
Questions
- What made Netflix a disruptor?
Pain points:
- Late fees
- Limited selection
- Having to go to the store
- Predictable subscription pricing
As well they saw up and coming:
- DVDs growing in popularity
- Broadband internet
- How did technological and market shifts later erode its advantages?
- The people who were licensing their content to Netflix started their own streaming services (Disney+, HBO Max, etc.)
- Netflix now had to enter the content creation space and compete there
- What strategic questions does Netflix face now?
- A transition from disruptor to disrupted. It is now being disrupted and being forced to change from a platform to a studio
- Instead of their low fixed cost model previously, they now have very high fixed costs.
- I think this might even be seen in Netflix’s infamous need to always end seasons in a cliffhanger to ensure subscribers stay on.
- Given these challenges, what should Netflix do next?
- Well we see now that they are introducing Ads to their subscription model to try and increase revenue
- I think selling consumer data is also very valuable, seeing watch times, when people drop out of watching, etc.
- Just like how Candy Crush makes a lot of money.