Business Models that Work: Netflix and TiVo

Netflix and TiVo are two companies that are constantly evolving their business models in an effort to not have their markets leave them behind. Let’s take a look at each.

Netflix, when it began, specialized in the DVD-by-mail business. This was a great model at the time (and was supported by a great website), but the inevitable time has come to where streaming content is replacing physical media. So, instead of dying with the DVD, Netflix has rolled out a browser-based streaming product with a ton of content behind it. Not only that, they’ve gone on to bring their services to consumer devices through partnerships with the likes of Microsoft (the upcoming update to the XBox 360) and TiVo. In short, Netflix saw a problem, tackled it head on, and are now reaping the rewards of being an early entrant into an emerging market. Their monthly subscription model is perfect for access to streaming media, all of which is only a web browser away.

TiVo is a provider of DVRs and the associated program lineup services that, like Netflix, relies on a monthly subscription service to make money. TiVo is essentially a company that provides a value-added service (time-shifting of TV and program-subscription services) to an existing industry (television). TiVo has in the past (and still does) face stiff competition from the likes of cable and sattellite companies that can develop their own DVRs to sell to their customer base. TiVo has had to evolve rapidly to keep their position as a premier player in order to stay competative. They’ve done so through their additions of HD DVRs, their partnership with NetFlix to enable streaming through TiVo boxes, and by creating a top-notch DVR. They’ve also kept subscription costs low to keep customers.

Of the two companies above, the one with the murkier future is TiVo. There’s nothing special about DVR software – free alternatives exist, and they’re only going to keep getting better. Also, as programming shifts online, their set-top market will shrink and eventually disappear. In order to have them around for the long term, expect them to evolve still.

Now, let’s look at an industry that have all but failed to change their business model, and now is withering away – the music industry. CD sales are in the tanks and the major record labels are in a terrible position since their core product strategy revolves around the CD. They failed to pioneer the online subscription model, and consumers have reacted by finding illegal alternatives. DRM has been a debacle – customers avoid it like the plague nowadays. To make matters worse in this case, though, the absolute most boneheaded response to a shifting market is to sue your customers. That’s just asinine.

Beating Poverty (via Your Library)

Today is the 2008 Blog Action Day, where bloggers get together to help do anything to beat poverty. Poverty is a truly sad thing because, in most part it’s a very solveable problem. Destitute poverty is a global issue that is actually unraveling and being solved day by day. That’s not to say, though, that there aren’t any challenges left.

One of my favorite authors who has written extensively on poverty is Jeffrey Sachs of The Earth Institute at Columbia University. He wrote a book in 2005 called The End of Poverty. I bought it, but I’ll admit to not having read it in it’s entirety – I’m getting to it, I swear! Seriously though, I’ve heard him speak a bit, and I’d say in almost any room he goes in, he’s the smartest guy there. His other book, Common Wealth, is another great read.

jQuery and Visual Studio

Did you get the chance to read that Visual Studio will be shipping with jQuery support included in the future? This news just made my day, more or less. If you aren’t in the know, jQuery is a really well developed JavaScript framework library. It includes support for things like making AJAX requests, easy DOM manipulation, and effects. There are a significant amount of controls written on top of jQuery that provide rich web experiences, and are as simple to use as integrating a plugin and adding markup to your HTML. The best part is that the use of a JavaScript framework has huge beneficial aspects on your cross-browser capabilities – all the framework methods are more or less guaranteed to work on everything from IE6 to Chrome!

Visual Studio ships with ASP.NET AJAX, which is kind of like the Microsoft bastardized attempt at a JavaScript framework. It’s been lagging behind jQuery and most other modern JavaScript frameworks since it’s introduction. Now, with full jQuery support, including intellisense, there’s little reason to have to use ASP.NET AJAX, in my opinion.

The one unfortunate aspect of official jQuery support in Visual Studio is that there are a lot of other competing frameworks, many of which are on par with jQuery, but whose market share will inevitably erode. Either way, a choice had to be made in this regard, and the right one was, in my opinion.

JavaScript can provide such a rich user experience nowadays that it rivals Flash/Air and Silverlight in many areas. It’s also getting faster (on a daily basis, seemingly), which bodes well for it’s future. If you haven’t checked out jQuery up to this point, it’s well worth a minute of your time.

Interesting Theories from Ron Paul

If you don’t know much about him, Ron Paul is this interesting, kooky Republican House member from Texas. I strongly disagree with many of his positions, but I really respect him for his economic views. Here he is talking about how he believes that America is bankrupt and must deal with the consequences of that. Check it out above, it’s well worth the four minutes it runs.