During the 80s and 90s, Blockbuster dominated the US home video rental market. H

Question

During the 80s and 90s, Blockbuster dominated the US home video rental market. However, the emergence of Netflix in 1997 with its ‘rental by mail’ model challenged Blockbuster’s business model (and market dominance). Blockbuster’s market position was further weakened when Netflix began to stream video content directly to consumers’ computers.

You should specifically address the role of technological diffusion, first movers and followers, and innovation.

In addition, please consider whether Netflix will continue to remain as the dominant online streaming provider in the US?

Explanation / Answer

Part-1

Technological diffusion- technology has helped a lot towards the development of business over the period the, in the scenario of Netflix and same category of players recent development in mobile technology and internet speed has played a role as game changer. The faster speed of internet has allowed people to stream faster and at the same time development of better smart phones has changed the way online products are delivered to the customer.

First movers and followers- Internet has been full of things for last 25 years and daily something new keeps coming. But first mover does not always guarantee you the success. In case of Blockbuster it was a first mover but Netflix cam with larger content and better technology in same field. Another competition which is Amazon Prime Video.

Innovation- Products cannot sustain without innovation, Blockbuster had to see downtime because Netflix came with better way of delivery of products. This new way of delivery was virtual called “Online”. This particular thing reduced the gap between ordering and online and delivery of products.

Part-2

With the type of above discussion we can say that it’s not sure whether Netflix will rule the market or not. Any other player which will provide better technology and user experience may get a better place in market. Today its Netflix, Tomorrow it may be Amazon or someone else.

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