Netflix vs. Blockbuster: A Business Evolution

In the late 1990s, Netflix faced financial struggles while mailing DVDs, and Blockbuster was a dominant force. Reed Hastings, Netflix's founder, sought a partnership with Blockbuster, envisioning Netflix as their online arm. Blockbuster declined, leading to its downfall as Netflix transitioned to streaming, offering convenience and binge-watching. Blockbuster's failure to adapt, due to internal conflicts and the innovator's dilemma, resulted in its decline, while Netflix thrived by embracing new technology and consumer habits.

What was Reed Hastings' main goal when he approached Blockbuster?

• To acquire Blockbuster

• To merge Netflix and Blockbuster

• To sell Netflix to Blockbuster

• To compete directly with Blockbuster

What was Netflix's initial business model in the late 1990s?

• Cable television

• Physical retail stores

• Online streaming

• Mailing DVDs

Why did Blockbuster decline Netflix's offer?

• They wanted to focus on international expansion

• They were confident in their existing business model

• They were planning to launch their own streaming service

• They believed Netflix had no future

What did Netflix predict about the future of video consumption?

• It would remain DVD-based

• It would shift to online streaming

• It would be dominated by cable TV

• It would return to VHS tapes

What was a key advantage of Netflix's service over Blockbuster's?

• Lower rental prices

• Faster delivery times

• Unlimited stock availability

• No late fees

What was a common frustration with Blockbuster's service?

• Limited store locations

• High rental prices

• Long wait times for new releases

• Out-of-stock popular movies

How does Netflix's binge-watching model compare to reading a book?

• It lets viewers consume content at their own pace

• It requires viewers to watch commercials

• It limits the number of episodes watched at a time

• It allows viewers to watch content at a fixed schedule

What did Netflix's model eliminate that was common in traditional TV?

• Subscription fees

• Commercial breaks

• Channel surfing

• Scheduled programming

What was a major reason for Blockbuster's failure to compete with Netflix?

• Lack of financial resources

• Internal conflicts and reluctance to change

• Poor customer service

• Limited movie selection

What dilemma did Blockbuster face that contributed to their downfall?

• Competing with other video rental companies

• Balancing existing business with potential new ventures

• Deciding whether to expand internationally

• Choosing between physical and online stores