Blockbuster, the one time giant in the DVD rental industry no longer exists. The company that knocked them down, Netflix, is able to do so because they had a selection that is unparalleled and having a much lower cost than Blockbuster (Brick and motor store v.s. E-commerce). Mailed DVD rental has been Netflix’s reason for success, but in 2007 Netflix began streaming online. (Check this “ancient” article out!) It was what they thought to be the future of the company. Netflix stayed ahead of the pack by having online streaming of DVD titles, which gives readers access to many titles that they can enjoy instantly. Online streaming has proven as a big hit.
Netflix and Blockbuster Boxing – clearly Netflix was Buster Douglas and Blockbuster was Mike Tyson in the famous 1990 Boxing match.
Netflix is now struggling to deal with the amount of competition that is beginning to mature in its online streaming business. Imitability is something that a firm needs in order to stay competitive in any given industry. Just like what Zara did to the fast, cheap fashion industry, where the supply chain was unique and hard to imitate. However, online streaming is not that very expensive to start. The main cost lies with the licensing of the titles. With other companies realizing online streaming as a profitable industry, Netflix begin to see an exponential growth in licensing costs. In late January, Netflix plans to use debt sale to cover licensing costs and original content. No company remain on the top forever (Yes, even Apple, with its stock plumbing down this fiscal year (check 52 week Highs and Lows) because of an unclear future after Steve Jobs’ death). The ever-crowded online streaming market that includes Netflix, Hulu, amazon.com’s Prime Instant Video has to welcome its latest competitor in the form of Time Warner Inc.’s Warner Archive Instant. With this news, Netflix’s stock went down nearly 4%. Netflix, being a very innovative company that started the trend in the past now needs to figure out a way so that they don’t get eliminated from this market.
Check this comparison of the biggest online streaming companies
Innovation is critical to success. This is what Apple was able to do till this day. Yet, being a successful company like Netflix, Apple now faces more and more competition. First there was the Android system, then the Blackberry OS. My fellow classmate, Marissa Giannetto has posted about Apple and how it tries to limit competition through their dominant IOS system on mobile devices, which now forces companies like Facebook to develop a counter strategy of a software that runs on android operating system that won’t limit Facebook’s development – Facebook Home.
Today, the most successful tech businesses are those that are able to develop better or innovative consumer technology. Apple is a prime example of that. Its technologies are able to transform not just one industry; it has the ability to change the face of more than one industry. Newspapers are affected by the development of tablets like the Ipad. Mobile phone industry has been affected by smartphones like the Iphone. Computer industry and Gaming industry have been affected by the development of mobile devices. But where do the world go next in terms of consumer technology? David Zax, a tech analysis at MIT Technology Review believe that the next innovative piece will come as the “Nexus where Apple and Nintento meet”. In an follow up article, he believe he had found it in the form of Razer Edge. Zax believes what is so special about the Razer Edge is not the fundamental characteristics, a 10-inch Windows 8 tablet, rather its supreme modularity – the ability for a system to separate and recombine. Traditional gamers would like controllers but at the same time does not want the controllers to be tied on to the tablet. The Razor Edge is able to attach and detach accessories at ease.
The Razor Edge, ladies and gentlemen.
As seen from many different examples, technology is constantly moving and attracts competition. Who doesn’t want to make a profit in a field that is booming? Just like the gold diggers that expanded westward in the 19th century, where there is profit there will be competition. It is only through innovation via technology will a firm be able to stay ahead and remain ahead.
On a sad side note, Former Prime Minister of United Kingdom, the “iron lady” (her uncompromising politics and leadership style) Margaret Thatcher passed away today. (For you that don’t know she is, check her importance to American politics here) May the Baroness Thatcher Rest in Peace.