“But without intellectual property . . .”

The next time someone claims that not having intellectual property laws will squash the little guy and let established companies rule the day, I’m going to remember to bring up Netflix. Mike Masnick at Techdirt reports on Blockbuster’s recent decision to file for bankruptcy — after the heroic Netflix has stolen most of their customers:

Late last week, there were a ton of press reports about how Blockbuster was preparing to declare Chapter 11 bankruptcy in September. It’s not shutting down, but just trying to restructure its debt, get out from under a bunch of store leases and try, try again. That said, this is yet another example of the fallacy of the claim of many that if you have a good idea some big company will just come along, copy it, and be successful. It also demonstrates the huge difference between idea and execution.

Netflix had a good idea and executed well on it. But for years everyone thought it was only a matter of time until the company got destroyed, because all these bigger (at the time) companies were just going to copy Netflix and win. First it was Wal-Mart. The retail giant started a service that seemed almost identical to Netflix way back in 2002. Everyone thought there was no way an upstart like Netflix could compete with the likes of Wal-Mart. Fast forward two and a half years and Netflix took over Wal-Mart’s online DVD rental business, because Wal-Mart’s offering couldn’t compete. …

And, of course, there was Blockbuster. It came out with a Netflix-like offer around the same time that Wal-Mart did, and while it held on for much longer, it was just never able to build up the same sort of userbase that Netflix did, and now the company is going to declare bankruptcy and try to restructure once again.

More at the link. It just goes to show that when you give people a little liberty, you never know what someone will come up with. A giant like Blockbuster or even WalMart can spend as much money as they’d like trying to copy an innovative, well-executed idea, but at the end of the day, the one who best pleases consumers will rule.

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