Are Your Clients Holding Your Business Captive?

Teddy Kim

Back in 2011, Netflix announced the separation of its streaming and DVD services along with different pricing schemes for each. Netflix customers revolted and the ensuing backlash caused Netflix to trim its quarterly growth projections by one million customers.



The Innovator’s Dilemma

Netflix CEO Reed Hastings was at pains to justify the decision. He took to the airwaves and Internet to explain that Netflix was focusing on its streaming business as the future of home entertainment. By carving out the DVD business, Netflix would be able to license more streaming content, without forcing DVD customers to subsidize the streaming business. 


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