Netflix Founder Warns Against Complacency
One of the founders behind SVOD behemoth Netflix has issued a warning against companies resting on their laurels as the one he helped found faces pressure from technology and entertainment giants like Apple and Disney entering the market it created.
Speaking at the 2019 Asia Pacific Cities Summit in Brisbane, Marc Randolph recounted the now famous story of how he and his co-founder Reed Hastings met with executives from Blockbuster to try and sell them their fledgling mail-order DVD company when it was less than three years old and around US$50 million in debt.
A little over a decade later Blockbuster, which at its peak employed more than 80,000 people around the world, was bankrupt.
“There is an encouraging story, that a handful of people, with no experience in the video business, could take down a $6 billion corporation,” Mr Randolph said according to the Brisbane Times.
“But there’s also a different story if you are the market leader, if you’re the one in front, if you’re resting on your laurels… the people who are going to come after you may look nothing like you.
“They may not even be in business today… and if you can’t figure out how to disrupt yourself, you are leaving it wide open for someone to disrupt it for you.”
Mr Randolph left Netflix in 2002.
Since then the company has grown to now have close to 150 million subscribers around the world, but is under threat from Apple and Disney, both of whom are set to launch SVOD services by the end of the year.
Apple’s TV+ offering will challenge Netflix on original content, with plans to spend around $2 billion on original content.
By comparison, Netflix is expected to spend around $15 billion on original content this year, despite its most popular show being the US remake of The Office, a network sitcom that finished airing on television more than six years ago.
The success of established, known quantity library shows combined with growing consumer choice paralysis bodes well for Disney, whose upcoming Disney+ streaming service will be able to take advantage of the entertainment giant’s swathe of iconic and familiar properties.
Disney owns its own nostalgia invoking collection of children’s movies, the Star Wars franchise, Marvel movies, and The Simpsons, which has more than three times as many episodes as The Office.