One of my favorite business moves over the past twenty years was the one Netflix pulled off. They started out as a subscription DVD rental business and evolved into the leader in subscription streaming video. I’ve never seen anything written about whether that was intentional all along or whether they figured it out as the business evolved. It doesn’t really matter, it was a great move in either case.
This move, the “analog to digital”, ought to be more common but I can’t think of many sectors in which it has played out that way.
But we are certainly witnessing another one in the ridesharing sector. If anyone really thinks that ridesharing is a way to get more drivers work, the news this morning that GM has invested $500mm in Lyft and will be strategic partners on “developing a network of self-driving cars that riders can call up on-demand” should put that to rest.
In this case it isn’t DVDs that will go away and replaced by bits. It is the drivers.
How this all plays out is anyone’s guess. But using an analog asset to build a large customer base that can then be leveraged in a native digital model is a great business move and I am surprised it has not been done in more markets over the past couple decades.
