With Netflix going from strength to strength while Blockbuster nears death, it’s intriguing to look at how we actually arrived at this point.
In essence it was the Web that won it for Netflix. Which shows the direction future battles of this kind are likely to go.
Netflix Beat Blockbuster
has well and truly beaten Blockbuster into the ground over the last few years. And it’s something that no analyst or industry watcher predicted.
It’s hard to fathom now but things were very different in 2005 when Netflix was a small, struggling operation whose shares were worth around $11 each while Blockbuster was a behemoth which had just broken free from the grip of Viacom. Now, Netflix shares trade at around $140, while Blockbuster is close to filing for bankruptcy.
So how did this happen?
The Key To Netflix’ Success
has a big write-up detailing how Netflix pulled this magic act off. The piece mainly looks at how a company which didn’t have a bricks and mortar presence managed to kill off one that did.
This in itself is very interesting because it shows that consumers are now at that point where they’re ready to buy from sources other than stores in their local town or mall.bBut the key to Netflix’ success, which the NYT barely touches on, is the ‘Watch Instantly’ part of the company’s subscription plan.
Had Netflix continued to just offer movies rentals by post then it wouldn’t be in the glorious position it is today. Instead, it realized how big a part of our present and future online video and video streaming is and incorporated that into its subscription plans.
Netflix is now adding subscribers at a rate of knots in the U.S., with most new subscribers opting for the $8.99 plan which allows unlimited access to ‘Watch Instantly’ content. And the majority of Netflix subscribers are now using ‘Watch Instantly’ on a regular basis.
Conclusions
Not only do retail companies no longer need a bricks and mortar presence, they can succeed by concentrating on the Web first and foremost. And nowhere is this truer than in the video sector. It’s just a shame that many content creators and copyright owners are slow on the uptake.
