1.7: Use Case Review: From Blockbuster to Netflix - Video Tutorials & Practice Problems

(silence) <v ->So why is agile so important nowadays</v> and what difference does it make? A great example is the comparison of Blockbuster and Netflix. The Netflix versus Blockbuster story has been told many times as the story of innovation, disruption and creativity. In my mind though this is the best story about the power of agile. When Netflix launched in 1997 Blockbuster was the undisputed champion in the video rental industry. Between 1985 and '92, the brick and mortar rental chain grew from its first location in Dallas, Texas to more than 2,800 locations around the world. Blockbuster considered Netflix to be small potatoes, and would come to realize only too late that having an online platform would be the best way for the future. By 2008, Netflix signed deals with Starz to stream around 1000 blockbuster movies and shows on its service, and that was followed by deals with Sony, Paramount, Lionsgate and Disney, so the fate of Blockbuster was decided. The same year, Blockbuster filed for bankruptcy having incurred nearly $1 billion in losses. So what did actually happen? Why did Blockbuster fall so fast and solo? What did they miss? What was that differentiated Netflix and made it so successful? Obviously it was a number of things, but most important in my mind was the agile mindset and customer obsession that Netflix had. Netflix agility was in its ability to rapidly evolve and continuously improved while being customer focused. When Blockbuster was charging high late fees which customer hated, and eventually they abandoned those, but it was too late for that, Netflix from the very beginning focused on ease of video delivery to the customers relating in streaming business. In many studies, Blockbuster is seen as a product failure versus management failure. Unlike Blockbuster which relied on in-store movie rentals and didn't adapt to the new technology, Netflix shifted it offerings focusing on streaming video and most recently on original content. In terms of vision, Blockbuster was focused on what? In store VHS rental, and lost track of their why, delivering convenient, in home entertainment for the whole family. And Simon Sinek said it in his famous book, start with why, understand customer problem and try to solve it. Product centric thinking and the ability to deliver fast, in incremental way, listen to their customers and adapt new technologies contributed to the rapid success of Netflix. Up until now, Netflix follows its original vision, to help content creators around the world find their global audience and make this content easily available to this audience. In this course, we will talk in detail about what does it mean for an enterprise to set its vision, to be agile in delivering against this vision while remaining customer centric, and in a nutshell deliver products that delight their customers. Now let's review the content of lesson one.