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Management article
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Reference no. S0401D
Published by: Harvard Business Publishing
Published in: "Strategy & Innovation Newsletter", 2004

Abstract

The video rental marketplace is poised for a battle between one David and two Goliaths. And although opening salvos have already been fired, the potential winner is still difficult to discern. Renting movie videos has become a form of entertainment so mainstream that most of us forget it was once a classic disruptive innovation, undermining all sorts of entertainment-field incumbents in the process. Now another marketplace battle is taking shape within this niche, this time between Blockbuster, the movie-rental giant and former disrupter, and Netflix, an on-line DVD-rental start-up with disruptive aspirations of its own.

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Abstract

The video rental marketplace is poised for a battle between one David and two Goliaths. And although opening salvos have already been fired, the potential winner is still difficult to discern. Renting movie videos has become a form of entertainment so mainstream that most of us forget it was once a classic disruptive innovation, undermining all sorts of entertainment-field incumbents in the process. Now another marketplace battle is taking shape within this niche, this time between Blockbuster, the movie-rental giant and former disrupter, and Netflix, an on-line DVD-rental start-up with disruptive aspirations of its own.

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