Netflix views streaming video as a "sustaining" technology that extends its core mail DVD business. Do you agree with this, or do you think streaming video is a "disruptive" technology for Netflix that does not align with its core business and requires a different strategy?


Answer: Netflix did a strategic renewal by cannibalizing its own cash cow business of mail-in-DVD services. This was the right move as internet speeds were increasing and moving towards broadband. Netflix was even considering launching a TV box if internet speeds remained constant. I agree that streaming video is a disruptive technology for Netflix, requiring a different strategy. Adopting a disruptive technology, Netflix forced Blockbuster to offer the mail-in-DVD service. By the time Blockbuster offered the mail-in-DVD service, Netflix had already begun experimenting with streaming videos and had started offering the streaming video platform. Netflix made Blockbuster dance to its tunes. Netflix, currently valued at $150 billion, changed its business model twice by cannibalizing its core services, shifting from mail-in- DVD service to subscription service to streaming video subscription service. This strategic renewal is one of the critical reasons for Netflix to become a valuable company and one of the pioneers in cloud computing that defined the architecture for AWS and set the freedom and responsibility culture for other silicon valley firms to emulate.