I was driving by a shuttered Blockbuster store recently and naturally I thought about disruptive technologies.
When VCR tapes first became popular, Mom and Pop stores started catering to a newly created market for movie rentals. I remember the excitement of being able to rent movies and, for a time, the video store became the place where you regularly saw friends and neighbors. Then Blockbuster came along and pushed those small stores out of business. The selection was better and you could keep the movie for a few days. Now Blockbuster has been shoved aside by Netflix, despite launching its own website and providing a similar service whereby you receive and return DVDs by mail. With its bankruptcy and later sale to Dish Network, Blockbuster and the video rental store has been officially rendered obsolete.
Now Netflix offers on demand streaming video of movies and old television shows. They have also announced deals for original content. Blockbuster was too slow to evolve and see the value of a flat fee subscription service and the convenience of mail. Netflix has taken the concept of video rental and is now becoming an important distribution channel and could possibly complete with cable channels for content.
Every business needs to beware of disruptive technologies that will render its business model obsolete or redefine the market. You never know where the threats might come from or how much time you will have to react to them.