A few weeks ago, I was reading back through Clayton Christensen’s classic book on disruptive innovation, The Innovator’s Dilemma, when a thought struck me:
We hear a lot about the strategic and product decisions that make companies disruptive, but we rarely see much about how those companies marketed their products.
Everyone knows, for example, that Netflix disrupted Blockbuster into bankruptcy. But what did it look like as that was happening? How was Netflix positioning itself to consumers? Could you look at their website back in 1998 and just smell the disruption?
So I went back and looked at every iteration of the Netflix home page I could find since the company began in 1997 and created a visual breakdown that takes you step-by-step through the evolution of what’s become one of the most fascinating (and ubiquitous) brands in the world.
I went into this a fan (and subscriber) of Netflix who had always been impressed with the company. But I came out with an even deeper appreciation for what they’ve achieved. Here’s why:
- If you’ve ever worked for a company or client trying to make big changes to its core product, business, or brand, you know how challenging repositioning is. Seeing how Netflix made the jump from “DVDs by mail” to 100% streaming content left me with tons of takeaways on what to do and what to avoid.
- Despite all the changes to their product and business, there’s been a remarkable consistency to the core part of their brand. By the end of the breakdown, you’ll see how they managed to do that.
- Over the years, they’ve gotten really good at only dedicating space on their home page to the benefits and features that matter most. This is always hard, but I think they’ve shown a lot of discipline.
A Quick Note on Disruption
“Disruptive” has unfortunately become an extremely lazy label for any tech company that seems like they’re “totally crushing it.” But truly disruptive innovations have very specific characteristics that Christensen laid out in his book, and Netflix actually fits them.
The most important distinction is that disruptive companies don’t start by improving on existing products—instead, they offer an entirely different value proposition that appeals to customers the dominant companies in their industry either don’t value or ignore completely.
Once the disruptor has captured those customers, they then move steadily upmarket and capture the dominant companies’ core customers.
When you see their first few home pages, you’ll see exactly how Netflix fits that mold. So let’s dive in!
The visual breakdown works like a slideshow: just click the arrow on the right side to advance (after you click the first time you can simply use your arrow keys).
Tip: If you’re on mobile, turn your phone to landscape for the best experience!
Before we go, I’ll leave you with an excerpt from an article Wired published during the 2011 price hike/Qwikster fiasco. I loved this, but couldn’t find a good way to work it into the breakdown (emphasis is my own):
“Finally, there are still millions of customers who don’t have a streaming video box or game console, who may not even have high-speed internet, and who still consume most of their video entertainment via DVD. As video stores across America closed, these people turned to Netflix. They were extremely loyal, but also probably the most price-sensitive.
“Netflix could have owned these customers for years, like AOL dial-up subscribers, hanging onto them and milking their loyalty in the absence of any real competition. Instead, it pissed them off, losing almost a million.”
I wanted to highlight this because it’s the exact type of thinking that leads many disruptive companies to eventually get disrupted themselves. Sure, the way Netflix broke apart their streaming and DVD-by-mail products could have gone smoother, and in hindsight they may have done things differently.
But it was their all-in mentality on streaming that allowed them to fundamentally alter their DNA as a company and commit themselves wholeheartedly to the future, even though it was incredibly difficult and costly in the short-run. Instead of becoming the disruptee, Netflix chose to disrupt themselves, which rarely happens.
If you’re curious to learn more about disruptive innovation and Netflix from a strategic perspective, I’d highly recommend the following books and articles:
- The Innovator’s Dilemma by Clayton Christensen
- The Innovator’s Solution by Clayton Christensen
- “Netflix and the Conservation of Attractive Profits,” an article by Ben Thompson of Stratechery (actually, I recommend just getting a Stratechery subscription and reading everything Ben has written about Netflix.)
- “The Three Tools Netflix Used to Build Its World-Class Brand,” an article from First Round
Anyway, I’d love to know what stood out to you about the evolution of Netflix’s brand. Leave a comment below and let me know!