We all know the story of Blockbuster: a beloved store where we’d spend our Friday evenings picking films to rent for the weekend ahead. It wasn’t until Netflix entered the scene that Blockbuster’s tale became a tragedy.
Blockbuster was founded in 1985 as a video rental service, with a fee if the movie was returned later. It was ahead of its time as the only way to rent movies at the time. Until Netflix came along in 1997 and offered online home delivery with no late fees.
When Blockbuster finally decided to offer the same service in 2004 (7 years too late), the $400 million setup inched them closer to bankruptcy. By this point they had already lost 75% of their market value. The worst part? They’d declined to buy Netflix for only $50 million back in 2000!
Netflix combatted the services of its competitor, and dominated the online market way before Blockbuster even had a chance. With a more user friendly approach to removing late fees, they became more valued in the customer’s eyes by removing a prominent pain point prevalent in Blockbuster’s rental service.
By identifying their customers’ needs, Netflix were able to stay one step ahead of the video rental game. By innovating algorithms that provided user-specific recommendations, the subscription service were able to convert their users into loyal customers.
Netflix, as a business, also excelled in the way they utilised upcoming advances in technology. By creating a platform that ran efficiently on multiple devices, they were able to dominate the streaming service market when new and exciting pieces of technology arose. Implementing their service onto browsers, mobile devices, and even pre-built into home entertainment systems, Netflix held the fort from the get-go.
“For the foreseeable future, businesses who will flourish are those able to deliver seamless customer experience through digital adoption along with those who have their finger on the pulse of the changing environment and demands of the consumers and businesses who have changed the priority on their services and goods due to the changing world.” – David Atherton, Sales Director at NoBlue.
Keeping on top of the changes within the digital mediums is crucial for businesses to adapt and survive – and is exactly where Blockbuster failed to keep up.
A business can be blindsided by any change in customer habits if they fail to pay attention at all times. Without a focus on their market, customers, employees, and research companies will fail to evolve and identify ways in which they are required to grow.
We all know how much Netflix have progressed, and how they continue to dominate the online streaming market. Especially during the Covid-19 pandemic, where most of us stayed indoors, Netflix was the go to entertainment.
