Staying In Front Through Technology and Innovation

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. Image

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.

ImageImage

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.

Image

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.

Image

Advertisements

2 thoughts on “Staying In Front Through Technology and Innovation

  1. I thought your post was very relavent to what we have been discussing in class. Every new industry creates competition almost instantly. All these online-streaming companies are competing directly with each other but also have to compete with online movie and television piracy sites. The internet has created a great deal of opportunity for these companies but is also a very difficult industry to keep running. For example, I have never found it necessary to have a Netflix account or another monthly service when I can use Hulu as well as free online-streaming. I think Netflix is a great company, don’t get me wrong, but I think the Netflix craze is a little excessive. The monthly fee is something that can easily be avoided. The amount that people pay for their cable (Verizon Fios and Comcast Xfinity) is already ridiculously steep. Why not take advantage of their online sites, such as Xfinity online, and if you really have a strong urge to watch something obscure buy it cheap on Amazon or eBay. Needless to say, I am going to try my hardest to avoid those monthly fees of Netflix and AmazonPrime.

  2. Great great great post ! “No company remain on the top forever” I strongly agree with this quote. I think no matter how big is your company, you must keep innovating and adapting in order to stay big. Because in this competitive economy, a small stagnation and loosening will cause a big lose. The way you link your blog post with another blog post is also very initiative. I really love the 2 not very relating but very informing paragraphs at the end. May the iron lady rest in peace!!!!!!!!!!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s