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Innovation: Netflix vs. Blockbuster

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Dices Over Newspaper - Pixabay

In September 2000, a minor start-up called Netflix proposed to be sold for 50 million dollars, to have a partnership with Blockbuster, one of the most successful entertainment companies. Netflix’s company was a mere fraction compared to Blockbuster's domination over the video rental market. What Blockbuster’s CEO, John Antioco, believed was a joke, was the very trigger of their tumble. Both companies had been well managed and shared a common viewpoint on managing a business. However, what indisputably turned the tables was Netflix's innovation and evolution. Let us determine, what innovation is and why so crucial in the business world.

A business may ascend from a variety of countless markets. Whether it has gained an outstanding reputation and clientele depends on how well it has coordinated.

Creativity - Pixabay

Finance, marketing, and people management are essential elements ensuring stability for a company. Though, to remain polished, it has constantly evolved. Every company oughts to increase profit. Although, most make impotent decisions likely to lead to losses.

Growth comes with the right tactic, but it is difficult to identify which is suitable for the desired outcome. Backtracking to the story of Netflix and Blockbuster, the failed partnership between the companies left Netflix on the brink of bankruptcy.

Business - Pixabay

Moving forward to 2004, Blockbuster similarly created an online DVD rental platform and canceled their extra fees for non-returned video rentals, compared to Netflix, which created an online streaming platform. By 2006 statistics started turning around. Blockbuster’s online platform had grown to just 2 million subscribers compared to Netflix with over 6.3 million subscribers. How did this happen?

Businesses should focus on their core job. To keep themselves lucrative they have to continue to neaten their product, which Blockbuster failed to invert time on. Blockbuster’s primary purpose was to bring entertainment into the homes of families, its incompetent decision to discard investing in its vital purpose led to the absence of improvement within its systems. It was an insignificant improvement in moving their shop online as there was no actual advancement. Netflix, in contrast, designed a coordinated platform for online streaming that guaranteed no late fees and personalized viewing.

Money - Pixabay

Blockbuster seemed the essence of home entertainment, once owning over 9,000 stores in the US, with more than 2,800 locations worldwide. Its leadership led the company to perform the ultimate efficiency. It was a tight network, so delicately structured there was simply no space to add more. It could not adapt to the rapidly changing world. Netflix, for instance, adjusted to fix and enhance itself to the demand for faster and cheaper video platforms. Inspecting Netflix over the last few years, it has reported a staggering net worth of 203 billion dollars.


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Purcell, W. (2019, October 31). The Importance of Innovation in Business.

Sloan, M. (2020, June 1). Netflix vs Blockbuster - The Official Case Study.

Zetlin, M. (2019, September 20). Blockbuster Could Have Bought Netflix for $50 Million, but the CEO Thought It Was a Joke.

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