Connected World Examines the Impact Digital Transformation has had on the Streaming Giant’s Rise to the Top of the Home Entertainment Market.
Netflix recorded profits of over $15 billion in 2017. But what if we told you that the international streaming giant nearly didn’t make its way to the forefront of the home entertainment industry, and at one point seemed destined to play second fiddle to its now obsolete older brother, Blockbuster?

The difference between the two and the reason Netflix is still around? They chose to embrace digital transformation in order to improve their business and the service they offer to their customers.

digital transformation

Netflix Had Humble Beginnings

Netflix wasn’t always a huge player in the video streaming space, in fact, the company started as a mail order service for DVDs. The founders of Netflix had the idea for mail-ordered DVDs after noticing that the then dominant home rental provider Blockbuster was lacking a great distribution and service model.

From their beginning, Netflix has endeavoured to improve on the mainstream, bypassing VHS tapes entirely and heading straight to DVDs long before the initial DVD boom.

Netflix Embraced Digital Transformation

Although VHS tapes were more popular at the time, Netflix felt that DVDs were to be the next step in the home entertainment journey and decided to aim for the future rather than investing in a current technology that had a limited time left in the market.
It’s this same attitude, embracing the latest technology, that made their streaming service the billion dollar empire it is today.
Netflix’ foresight to the new direction for home entertainment meant that other home companies (such as Blockbuster) simply could not develop their technologies fast enough to keep up.

Why Should I Care?

Many businesses will continue to use adequate technology due to it being, well, adequate. The term ‘if it isn’t broke, don’t fix it’ cannot be followed when it comes to business technologies. In  Blockbuster’s case, becoming complacent and using tech that – on the surface – appeared to be working was detrimental to their business in the long term.

Think of your main competitor. If they incorporated new technology into their business that substantially reduced costs for customers or improved their service, how many of your customers would stick with you?