Netflix; big bang’ disruption
After the sensational launch of e-volve, intelligent artwork automation, I’ve been reflecting on other game changers who have pioneered change within their industries and asking what we can learn from their experiences.
‘Big bang’ disruption differs from normal disruption in that the start-up offers an innovation that’s not only cheaper, but better — higher quality, more convenient, or both — almost straight away.
Netflix disrupted the video rental market at least twice—first with its DVD mailing service and then, in 2007, with its streaming Internet-based service, which clearly met the better and cheaper criteria for a true Big Bang Disruption. Consumers jumped en-masse, destroying Blockbuster and other retail rental chains in just a few years.
Harvard Business Review
At its peak, Blockbuster operated 10,000 stores and in 2002, the company had a market value of $5 billion. The brand was a household name and synonymous with video and DVD rentals. Then in 1997, Netflix happened. The scrappy start-up built a distribution model that relied exclusively on mailing DVDs to customers through the low-cost U.S. postal service. It competed mainly on price and without the late fees that annoyed Blockbuster customers.
In 2007 Netflix launched its digital service and became an innovator offering better and cheaper goods than Blockbuster. For a monthly fee, Netflix customers could watch all the movies and television programs they want, whenever they want, and without ever leaving the house and without the need for physical media of any kind. Netflix’s digital transformation now includes original programming as well as streaming and in 2021 Netflix boasts over 200 million subscribers worldwide.
Blockbuster’s retail stores had once been its core asset but as streaming took off they became an expensive liability and ultimately reduced the company’s ability to compete despite a late attempt to launch its own streaming service. By 2010, the once-unbeatable company declared bankruptcy.
To survive and thrive your profit needs to be linked to what your customers value. Film audiences ultimately valued access to a quality library of product and the convenience of viewing on demand which Netflix recognised and brought to market through digital technology.
At Sun Strategy our clients value transparency, convenience and value which our real time data offers to report and manage their packaging ensuring it’s right first time and creating value whilst reducing waste.
Instead of fearing automation and disruptive technology, companies should be embracing the coming change and future-proofing their business.
Organisations are losing $140 billion each year in wasted time and resources, duplication of effort, and missed opportunities as a result of disconnected data
About the author
Kevin McAulay - Account Director
Kevin has over 20 years experience in managing print and graphics for multiple global FMCG and retail companies. Kevin has experience working onsite at a number of clients sites including Nestle and Unilever and managing remote teams, with a great understanding of stakeholder engagement across multi disciplines.
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