Netflix: Streaming vs DVD-by-Mail (2007)
by Anonymous
Reed Hastings bet Netflix's future on streaming video over the internet, even though DVD-by-mail was profitable. Blockbuster declined to buy Netflix for $50 million in 2000. The pivot destroyed Blockbuster and transformed entertainment.
Streaming (Netflix Pivot)
2007
year
Instant over internet
delivery method
Limited initially, grew rapidly
content library
Won — Netflix worth $150B+, Blockbuster bankrupt
outcome
DVD-by-Mail (Status Quo)
1998-2007
year
Physical discs shipped
delivery method
Vast — every DVD available
content library
Profitable but declining
outcome
Brick-and-Mortar Rental (Blockbuster)
1985-2010
year
Drive to store, browse, rent
delivery method
Large but requires inventory
content library
Bankrupt by 2010
outcome
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