What Is Netflix Doing?

September 20, 2011 in Daily Bulletin

A couple months ago, Netflix received some negative publicity when they announced price hikes for certain services. However, that announcement seems small in comparison to the one they recently made – they’re splitting their company in half. Half of their company will remain as Netflix, and this part of the company will offer online streaming services. The other half of the company will now be named Qwikster and will offer DVDs through the mail. Many customers are upset about this as the things now offered by Netflix will now be taken care of by two companies making some things more difficult for customers. However, Netflix originally started out as an innovative “disruptive technology” and was able to overtake Blockbuster in offering movie rentals. Once a company goes from “disruptive technology” to an established company, though, they tend to be a bit more conservative and adopt more traditional strategies. It seems that Netflix is not following this business template, though, as they continue to be aggressive and look for ways to change that may not initially make their customers happy. As the article points out, many great companies are overtaken by disruptive technologies because they listen to their customers and customers often don’t know what is in their best interest. Then, customers begin to see the disruptive technology as better than the company they currently use and the disruptive technology takes over. Perhaps by not listening to their customers, Netflix is staying ahead of the competition.

Source: Slate