Comment by maeln

6 hours ago

> Most notably Sony which produced TVs, Computers, DVD players, Media Centers. They owned a movie studio and record label. They also have in house expertise with cloud content distribution via PlayStation.

I feel like some of those very diversified company tend to be the one who struggle to evolve and adapt because some part of their business are worried about being cannibalized by the new business opportunity (like how streaming “killed” physical media). I.e, if you are the director of the “DVD player division” you have an active interest in killing any potential streaming division. Reality is of course more complex than this, but this is the kind of story we sometimes hear off when "too big to fail" companies end up missing a major shift.

2 comments

maeln

Reply
yannyu  38 minutes ago

Innovator's dilemma. Leadership won't invest in the up-and-coming product because they've got a $1 billion revenue target they need to hit this year.

Funnily, Netflix is a common case study on how to transition past the dilemma.

I don't remember where I heard the original story, but this snippet from this article sums up why and how they deliberately cut the DVD team out of the company culture.

> “In periods of radical change in any industry, the legacy players generally have a challenge, which is they’re trying to protect their legacy businesses. We entered into a business in transition when we started mailing DVDs 25 years ago. We knew that physical media was not going to be the future. When I met Reed Hastings in 1999, he described the world we live in right now, which is almost all entertainment is going to come into the home on the internet. And he told me that at a time when literally no entertainment was coming into the home on the internet. And it really helped us navigate this transition from physical to digital, because we just didn’t spend any time trying to protect our DVD business. As it started to wane, we started to invest more and more in streaming. And we did that because we knew that that’s where the puck was going. At one point, our DVD business was driving all the profit of the business and a lot of the revenue, and we made a conscious decision to stop inviting the DVD employees to the company meeting. We were that rigid about where this thing was heading.”

https://colemaninsights.com/coleman-insights-blog/netflixs-s...