It was never really clear what the disruptive innovation was supposed to be. It seems like the only 'streaming' company with an advantageous cost structure and differentiated business model is YouTube.

> It was never really clear what the disruptive innovation was supposed to be.

Unbundling TV/Movie content from Cable providers was the disruption.

You wouldn't need to pay for Cable TV just to get internet.

You wouldn't need to pay for Broadband, just to watch the show you wanted - assuming you had internet access some other way.

It also offered the promise of relaxing control of where/when/how you watched content.

Content on Demand used to be a premium feature, you largely had content delivered to you in channels, and only a limited range. You could record content to watch it later, but that required another device (or a Cable box capable of doing it)

Location was also tightly controlled - you could only watch certain content in one room, in one house.

Wanted to watch a movie in your Hotel Room? Buy it from the Hotel. At your friends' place while you're staying with them? Only if they had the right Cable subscription.

Yes, Cable companies offered streaming, and on demand, and all that other stuff - but largely only after Netflix had proven it out.

> Cable companies offered streaming, and on demand, and all that other stuff - but largely only after Netflix had proven it out.

In other words, they waited for Netflix to do the expensive and risky work of building out the market and refining the streaming infrastructure. Then they used the money they got from licensing their IP to Netflix and built out their own offerings. Sounds like good business.

Back in the 90s Blockbusters was considered a disruptive tech company, pioneering the then-novel VHS-on-demand model to disrupt the status quo of cinemas and broadcasters, making its market cap worthy of sky-high earnings multiples.

... Or maybe it wasn't, and Netflix shouldn't have been either. They're fundamentally solving the same problem and delivering essentially the same value, and Blockbusters had the advantage that first-sale doctrine meant they didn't have to strike expensive licensing agreements with studios in order to serve their content.

If Netflix can combine their streaming service with their DVD catalogue, and side-step licensing restrictions by streaming data from a physical DVD in their collection to paying customers, maybe they can win back that attention. But I assume that such an application has already been challenged in court.

There was nothing novel about Blockbuster other than scale. VHS-on-demand started in the 70's (but didn't really get rolling until the 80's) with mom-and-pop video rental stores (which Blockbuster itself started as in 1985) which grew into small local/regional chains. Blockbuster became a roll-up of the smaller chains and most successful mom-and-pops and specialized in raising prices and maximizing revenue via late fees.

>by streaming data from a physical DVD in their collection

Someone tried that a few years ago, using the position that they were renting out a DVD player and a very long cable. Courts didn't accept that argument and they got shut down.

It was the truly 'on demand' aspect of it. Before that, the best most people could do was get a Tivo and time-shift programming which the cable companies fought hard (and lost) to stop.[1] Cable TV's version of 'on demand' up to that point was for customers to tune in at the scheduled time your movie was airing and press the buy button. Then services like Netflix came along and said 'just come to our website and watch anything in our catalog whenever you want.'

[1] Anyone today with cable service might notice how you get your Tivo functionality from set-top boxes supplied by the cable company. That's the same thing they're trying to do with streaming. They're not so much against it as trying to buy time to build out their own services to compete.

My impression is that the disruptive innovation was literally just the fact that you’re using a new physical medium to get content onto people’s screens. “Old media” controlled the literal wires and airwaves that brought content into homes, until eventually enough people had access to these fancy new Internet wires and airwaves, so you didn’t have to be one of the few old media companies in order to sell content to people.

There was no disruptive innovation at all if a dozen companies all have a streaming service. Netflix was a car dealer for movie studios, only unlike car dealers they didn't write their position into law, and now the movie studios have had time to poach talent and eat their lunch. If netflix were truly savy they would have bought some legislation very early to make it illegal for a producer to distribute content themselves. Maybe they tried, I'm not sure.

It's hard to remember the talk from 5–10 years ago, but I guess it was the original productions. The word of mouth about House of Cards, for instance. In hindsight, nothing about that was unique to Netflix, but it was easy to get caught up in the hype.

Before the originals I think was even more of a netflix golden era. the streaming catalogue was really quite large. Producers were actually permissive with licensing deals. Netflix was like car dealer to them, providing and maintaining this digital distribution service so they didn't have to. Only netflix didn't protect themselves with law like car dealers did, and over time these producers opened up their own streaming departments and hired talent from netflix and began competing in this space instead of licensing content.

This exactly.

YouTube’s business model is so simple it’s phenomenal. Only reason Google will continue doing well for investors as they are no viable alternatives to YouTube in the near future

> I'm sure others were, to think of streaming as new media vs. old media.

I still think that's true. The fact that there is a maximum saturation level is unsurprising. Because internet speeds and availability equates to netflix availability, I was surprised Netflix saturation took this long.