After discussing in class about RIM's current situation and their failure to pivot as a company, I stumbled across some recent news regarding Netflix. According to the New York Times, Netflix has decided to separate their through the mail DVD rental service from their online streaming service. Prior to these changes DVD-by-mail was a $2 add-on for some streaming subscribers; now, each service now costs $8. Entering July Netflix had 22 million subscribers to the streaming service, 12 million of whom would also opt for the DVD-by-mail service. With the separation of the two services and the price hike, Netflix has seen a loss of 800,000 DVD-by-mail subscribers along with 200,000 streaming subscribers. The loss in net income has seen the Netflix stock drop by 15% and has been slow to recover over the past few months.
I found this particular article to be rather interesting given that in class we've discussed on several occasions the concept of pivoting. This particular case will be interesting to monitor and see whether or not Netflix made the right decision to pivot or if they would have been better off to stick with their previous strategy.
Check out the link Here
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