Netflux – A Qwikster Innovation Divorce for Netflix

Netflux - A Qwikster Innovation Divorce for NetflixBreaking up is hard to do, but sometimes it is the right thing to do.

Imagine my surprise when an e-mail from Reed Hastings, Co-Founder and CEO of Netflix arrived in my inbox this morning announcing that Ms. Netflix was getting an innovation divorce.

Yes, Ms. Netflix has decided to send her old man packing and is no longer ashamed to tell you his name – Qwikster. Yes, Mr. Qwikster has been kicked to the curb with his DVD and Blu-Ray collection. Rumor has it Mr. Qwiskter was caught having a ‘qwikie’ with a mature video game, and Ms. Netflix decided she’d had enough. The newly independent Ms. Netflix announced she planned to devote all of her energy to her passion for streaming content now that Mr. Qwikster was out of the picture. Both hope that their individual pictures will be sharper after the breakup – and in full high-definition. They will share custody of their children Television and Movies, with Ms. Netflix getting custody online and Mr. Qwikster maintaining his relationship with the two by mail. Some friends of Ms. Netflix and Mr. Qwikster have already abandoned one or the other, with some people maintaining a relationship with both. In time we will find out who really has more friends.

I wish both Ms. Netflix and Mr. Qwikster the best of luck in their new lives apart from each other.

The Importance of Focus to Innovation

Surely I jest, but this news event has important innovation implications to discuss, and innovation should be about fun. The most important of these implications is focus.

When it comes to innovation, scale and breadth of offering often lose out to focus.

But few leaders have the courage to make the hard choices that are often necessary to keep innovation vibrant and the executives focused where they need to have their attention, while liberating the entrepreneurs to pursue the next best innovation with the passionate persistence it takes to succeed.

The divorce will allow each business to optimize its supply chain, its strategy, and most importantly will allow executives to spend less time in meetings that don’t effect their sphere of impact so that they can focus on identifying and executing innovation projects that create new value for their customers.

While I believe that Netflix strategically mishandled the execution of their innovation divorce from Qwikster, I must applaud its rationale. Although, I’m not so sure about the line in Reed’s e-mail where he talks about AOL and Border’s. Does that mean that he thinks that Qwikster is dead on arrival?

Personally I used to play Blockbuster and Redbox off of each other until my local Blockbuster went out of business. That forced me into a ‘friendship’ with Mr. Qwikster and Ms. Netflix. Now, I probably get more value out of my relationship with Mr. Qwikster because I can order old Disney classics like Chitty Chitty Bang Bang to watch with my daughter, but if Ms. Netflix ever got her act together and formed real relationships with people like Mr. Disney and his friends Hanna and Barbera, then maybe I would ask Mr. Qwikster to stop mailing me stuff.

It will be interesting to see how Ms. Netflix and Mr. Qwiskter develop on their own. Ms. Netflix faces a huge headwind in building real relationships with the movie and television studios, and there is no guarantee that Netflix will win in the streaming space. Redbox is entering the space, Amazon is there, and Apple and maybe even Spotify pose real risks. Who will win? I don’t know, but it will be interesting to watch, although maybe not in 3D.

One Final Thought

I’m not so sure about the new name though – Qwikster – what is that? A cross between Quicken and Friendster?

I would be curious to hear what your take is on the name and whether you believe they will be able to achieve more innovation apart than together.

Editor’s Note: I will be conducting two-day innovation masterclasses in Dubai (October 23-24, 2011 at the Four Points Sheraton Dubai) and Kuala Lumpur (October 26-27, 2011 at The Renaissance Kuala Lumpur) if you would like to attend, please click this link for more information from the event organizers. If you would like to organize this masterclass to come to your part of the world, please contact me.

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