We have often found that CEOs who build great businesses tend to have utmost respect for their competition. In what promises to be the mother of all rivalries, the crowded video streaming industry features the punch up between perhaps the greatest entertainment company ever – Disney versus perhaps the greatest disruptor of all time – Netflix. Or in this case, have the roles of the incumbent and disruptor reversed? Disney announced earlier this month that they have mopped up more than 50m subscribers for its recently launcehd streaming service Disney+, clearly posing a threat to Netflix’s dominance. Netflix itself reported a substantial rise in subscribers (helped by the lockdown) to 189m. Here’s what Reed Hastings, Netflix’s co-founder and CEO had to say about Disney in last week’s earnings call:
“Over 20 years of watching different businesses — incumbents like Blockbuster and Walmart and all these companies — I’ve never seen such a good execution of the incumbent learning the new way and mastering it…To see both the execution and the numbers line up, my hat’s off to them…Great execution, clarity around brand and focus really makes a difference.”
Hastings is one of the world’s experts on disruption, having successfully defeated Blockbuster and the video rental business with a novel mail-DVD service before upending the traditional pay-TV ecosystem with lower priced streaming video. Netflix announced today it had 183 million global customers, up 15 million subscribers in the first quarter.
While incumbents often struggle to transform their businesses, a topic detailed in Clayton Christensen’s “The Innovator’s Dilemma,” Hastings’s Netflix has graduated from disrupter to top dog as streaming has become more ubiquitous. He said Netflix would continue to focus on its own service rather than the competition because “there’s nothing we can do about them.”

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