The Netflix vs. Blockbuster Moment: How Progressive Delivery Prevents Digital Extinction

Every organization fears becoming the next Blockbuster—a once-dominant company that failed to adapt to technological change and vanished almost overnight. But here’s what most people miss about the Blockbuster story: It wasn’t that they ignored the internet. They actually launched Blockbuster Online in 2004, well before streaming became mainstream. Their fatal flaw wasn’t failing to see the future. It was failing to build systems that could adapt to an uncertain future.

Netflix, meanwhile, didn’t just predict streaming would win—they built an organization capable of evolving from DVD-by-mail to streaming to content creation to a global entertainment platform. They optimized for adaptability, not just efficiency.

This distinction is at the heart of what separates companies that thrive through technological disruption from those that become cautionary tales. It’s also why Progressive Delivery has become essential for long-term organizational survival.

The Physics of Organizational Change

In their upcoming book Progressive Delivery, authors James Governor, Kim Harrison, Heidi Waterhouse, and Adam Zimman introduce the concept of “technological jerk“—borrowed from physics, where jerk describes the sudden, jarring changes in acceleration that throw systems off balance.

Organizations experience technological jerk when they can’t absorb the rate of change in their environment. Blockbuster experienced massive jerk when streaming technology suddenly made their entire infrastructure obsolete. They had optimized for one type of motion (physical distribution) but hadn’t built the capability to handle a completely different type of motion (digital distribution).

Netflix, by contrast, built what the authors call “shock absorbers” into their system—the ability to sense environmental changes and adapt smoothly rather than being thrown off course.

The Nike Lesson: Riding the Wave

Consider how Nike navigated the internet revolution of the late 1990s. When e-commerce emerged, Nike didn’t just build a website—they created NIKEiD, allowing customers to design custom shoes online. This wasn’t just digitizing their existing business; it was reimagining what was possible when abundance met innovation.

As Ron Forrester, who worked on the original NIKEiD project, recalls: “Before NIKEiD, only our shoe designers could design shoes…NIKEiD was an expression of pushing capabilities that only shoe designers had to the customer.”

The project required massive technological investment—custom image rendering systems, integration with manufacturing, and infrastructure to handle traffic spikes during product launches. Nike committed abundant resources to an uncertain bet, but they did so with a framework that could evolve.

Twenty-five years later, NIKEiD (now Nike By You) generates “significant revenue and a large portion of our total e-commerce business,” according to Ken Dice, Nike’s vice president of NIKEiD. More importantly, the technological capabilities Nike built for customization became the foundation for everything from supply chain optimization to AI-powered design tools.

Nike didn’t just survive the internet revolution—they used it to fundamentally expand what their business could be.

The Four Forces of Adaptation

What separated Netflix and Nike from companies that didn’t survive technological transitions? They intuitively understood what Progressive Delivery makes explicit: successful adaptation requires balancing four key forces, what the authors call the Four A’s:

1. Abundance: Having sufficient resources to experiment and fail. Netflix spent billions on content before they knew if original programming would work. Nike invested heavily in 3D rendering and manufacturing integration for an unproven market. Both companies treated uncertainty as a reason to invest more, not less.
2. Autonomy: Empowering teams to move quickly without getting trapped in bureaucracy. Netflix’s famous “keeper team” philosophy and Nike’s project-based innovation both reflected a willingness to give teams the authority to make big bets. When the environment is changing rapidly, waiting for consensus is often fatal.
3. Alignment: Maintaining focus on core user value while everything else shifts. Netflix never lost sight of the fundamental user need: convenient access to entertainment. Nike remained focused on enabling athletic performance and self-expression. Their technologies changed dramatically, but their north star remained constant.
4. Automation: Building systems that can operate reliably while everything else changes. Both companies invested heavily in the infrastructure that would let them iterate rapidly—recommendation algorithms, manufacturing automation, deployment pipelines, user feedback systems. They automated the predictable so they could focus human energy on the uncertain.

The AI Inflection Point

We’re currently living through another “Netflix vs. Blockbuster moment” with artificial intelligence. Every organization is grappling with how AI will change their industry, their customers, and their competitive landscape.

Early indicators suggest that organizations practicing Progressive Delivery principles are adapting more successfully:

• Adobe has integrated AI across their Creative Cloud suite while giving users control over when and how they adopt new AI models. Users can stick with familiar versions for ongoing projects while experimenting with cutting-edge capabilities for new work.
• GitHub uses AI to accelerate developer productivity while maintaining the core workflow developers depend on. Their Copilot integration enhances existing processes rather than replacing them entirely.
• Disney is incorporating AI into both their digital platforms and physical theme park experiences, but they’re doing so progressively—testing in controlled environments before exposing guests to potentially disruptive changes.

What these companies share isn’t a specific AI strategy—it’s an organizational capability to absorb and integrate new technologies without losing their existing strengths.

The Extinction Warning Signs

How can you tell if your organization is heading toward a “Blockbuster moment”? Watch for these warning signs:

• Resource Scarcity Thinking: “We can’t afford to experiment with new technologies until we’re sure they’ll work.” This is exactly backward—you can’t afford NOT to experiment when the environment is changing rapidly.
• Change Resistance: Users consistently complain about the pace of updates, or teams resist adopting new tools and processes. This suggests your organization has optimized for efficiency in the current state rather than adaptability to future states.
• Alignment Breakdown: Different parts of the organization are pulling in different directions, or there’s constant conflict between “innovation” and “stability” factions. This indicates a lack of shared understanding about how to balance present needs with future preparation.
• Manual Everything: Processes that should be automated still require human intervention, leaving no bandwidth for strategic work. Organizations that can’t automate the predictable can’t focus on the uncertain.

Building Your Organizational Shock Absorbers

The good news is that Progressive Delivery isn’t about predicting the future—it’s about building systems that can adapt to whatever future emerges. You can start strengthening your organization’s adaptability today:

• Invest in Abundance: Create slack in your system. Organizations operating at 100% capacity can’t respond to unexpected opportunities or threats. Build buffers—in budget, in time, in team capacity.
• Distribute Autonomy: Push decision-making authority as close to the impact as possible. The people closest to customers, technology, or operational realities often see changes first.
• Maintain Alignment: Regularly revisit and communicate your core purpose. What fundamental user value are you serving? That purpose should remain constant even as your methods evolve dramatically.
• Automate Relentlessly: Identify repetitive processes and systematically eliminate manual work. Every process you automate frees up human capacity to focus on adaptation and innovation.

The Continuous Evolution Imperative

The companies that thrive through technological disruption share a crucial insight: adaptation isn’t a one-time response to crisis—it’s a continuous organizational capability.

Netflix didn’t stop evolving after conquering streaming. They’ve continued to reinvent themselves through data science, global expansion, interactive content, and now gaming. Nike didn’t stop after NIKEiD—they’ve continued pushing into sustainability, direct-to-consumer experiences, and digital fitness platforms.

Both companies treat their current success as a platform for the next evolution, not an endpoint to defend.

Your Netflix Moment

Every organization will face technological disruptions that could either accelerate their growth or threaten their existence. The question isn’t whether these moments will come—it’s whether you’ll be ready for them.

Progressive Delivery provides a framework for building organizational systems that can absorb technological jerk and transform it into forward momentum. It’s not about moving faster—it’s about moving more adaptively.

The next major technological shift is already emerging somewhere. The companies that will thrive through it aren’t necessarily the ones that predict it first—they’re the ones building the capability to evolve with whatever comes next.

Don’t wait for your Blockbuster moment to start building your organizational shock absorbers. The future of your company may depend on the adaptability you build today.This post explores concepts from the upcoming book Progressive Delivery: Build The Right Thing For The Right People At The Right Time by James Governor, Kim Harrison, Heidi Waterhouse, and Adam Zimman (IT Revolution Press, November 2025).

- About The Authors

Leah Brown

Managing Editor at IT Revolution working on publishing books and guidance papers for the modern business leader. I also oversee the production of the IT Revolution blog, combining the best of responsible, human-centered content with the assistance of AI tools.

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