Netflix's 'creative destruction' or how to reconquer the market from scratch
Posted: Mon Jan 06, 2025 5:58 am
It wasn't always a streaming platform. It didn't always produce iconic series that everyone would talk about. In its origins, back in 1997, Netflix started out as an online DVD rental business. But it was the company's own people who decided to end this project to re-establish itself as something bigger, more relevant.
It's all described in Gina Keating's book 'Netflixed: The Epic Battle for America's Eyeballs' , but, as a synopsis, suffice it to say that it is the story of a controlled self-demolition that rather than rising like a phoenix intended to revolutionize the film and television market. And they succeeded.
As we mentioned above, Netflix was born in 1997 at the hands of entrepreneurs –from Silicon Valley, of course– Marc Randolph and Reed Hasting. It started out as an online DVD rental business at a time when DVD players were not such a common technology. Back then, blockbusters continued to break the box office records almost every weekend, but Netflix’s project with its rental proposal through its platform reduced the number of people in cinemas, to the detriment of the incipient boom in home cinema.
Hasting and Randolph's idea venezuela number data was so successful that the day they launched the business the server crashed. However, the profits were not as expected and a decade later they began a change of strategy that was the seed of what we know today as Netflix.
Thus, in 2007 they began to explore the world of streaming when this possibility was not yet widely known and when the technology that made it possible was almost undeveloped, but where two technological giants such as Google and Amazon were already operating.
They did so by destroying their previous business. To do so, they resorted to a number of strategies, such as destroying their subscriber base by raising fees and offering a loss-making service. Despite this risky decision, they received proof that they were on the right track when Blockbuster collapsed in 2010, with losses of more than $1 billion. It was then that they sprinted into the video-on-demand business until they became the platform they are today.
According to the Emprendedores website, the Netflix example was brought up by Diego Sebastián, director of innovation at Hawkers, at a meeting entitled 'Ideas & Breakfast'. He spoke about what is known as 'Radical Innovation' and, within it, the strategy known as creative destruction.
This concept tries to differentiate what is commonly known as linear innovation for business progress and disruptive innovation , which is that which achieves a relevant change in people's habits or contributes something that did not exist until the moment of its appearance. X-rays are an example of this type of innovation.
To reach these kinds of findings, it is necessary to delve into the depths of disruptive innovation, where the big problem is within the dynamics of the company and is the same one that will lead you to the linear model.
It's all described in Gina Keating's book 'Netflixed: The Epic Battle for America's Eyeballs' , but, as a synopsis, suffice it to say that it is the story of a controlled self-demolition that rather than rising like a phoenix intended to revolutionize the film and television market. And they succeeded.
As we mentioned above, Netflix was born in 1997 at the hands of entrepreneurs –from Silicon Valley, of course– Marc Randolph and Reed Hasting. It started out as an online DVD rental business at a time when DVD players were not such a common technology. Back then, blockbusters continued to break the box office records almost every weekend, but Netflix’s project with its rental proposal through its platform reduced the number of people in cinemas, to the detriment of the incipient boom in home cinema.
Hasting and Randolph's idea venezuela number data was so successful that the day they launched the business the server crashed. However, the profits were not as expected and a decade later they began a change of strategy that was the seed of what we know today as Netflix.
Thus, in 2007 they began to explore the world of streaming when this possibility was not yet widely known and when the technology that made it possible was almost undeveloped, but where two technological giants such as Google and Amazon were already operating.
They did so by destroying their previous business. To do so, they resorted to a number of strategies, such as destroying their subscriber base by raising fees and offering a loss-making service. Despite this risky decision, they received proof that they were on the right track when Blockbuster collapsed in 2010, with losses of more than $1 billion. It was then that they sprinted into the video-on-demand business until they became the platform they are today.
According to the Emprendedores website, the Netflix example was brought up by Diego Sebastián, director of innovation at Hawkers, at a meeting entitled 'Ideas & Breakfast'. He spoke about what is known as 'Radical Innovation' and, within it, the strategy known as creative destruction.
This concept tries to differentiate what is commonly known as linear innovation for business progress and disruptive innovation , which is that which achieves a relevant change in people's habits or contributes something that did not exist until the moment of its appearance. X-rays are an example of this type of innovation.
To reach these kinds of findings, it is necessary to delve into the depths of disruptive innovation, where the big problem is within the dynamics of the company and is the same one that will lead you to the linear model.