Netflix Stays One Step Ahead of Creative Destruction: Netflix has been planning for the demise of its core business ever since it began. They started the company with the ultimate plan of streaming video over the Net, and developed the mail business to bide time until technology caught up with their vision.
The company was formed in 1997 with the idea of sending movie DVDs, then a new technology, through the mail. But Reed Hastings, the founder and chief executive, and early employees, recognized that delivery of movies over the Internet would replace the mail carrier soon. They named the company Netflix, not Mailflix or DVDs by Mail.
[…] It was only last year, more than a decade after its founding, that streaming movies started to take off. But it was Netflix pushing people to do it, even though it meant that the company might rent fewer discs by mail.
The DVD-by-mail concept is dying, but that’s okay because Netflix planned for it to happen that way. It’s passively trying to kill the mail business by pushing people into using the streaming service, where Netflix always assumed they would end up anyway.