The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- By now, it's old news that Netflix has aborted its plan to break up its service into separate DVD-by-mail and online streaming services. And by now, we all know why. Customers were in revolt over the changes to a brand that they loved and the price increases that were necessary to make those changes possible.
Buck that inexorable trend, and you run what's really the greatest risk, of becoming the next Blockbuster or Borders. Steve Jobs is the legend he became because he understood that "
s ometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving other innovations." Reed Hastings knows it too. It's possible, just possible, that he has more in common with Steve Jobs than his current detractors might recognize. Up until September, he could do no wrong. Fortune's 2010 business person of the year, he was hailed as a bold visionary for capitalizing on the next big idea that revolutionized an industry. Blockbuster, less nimble and quick, ignored the changing business dynamic and authored its own demise. By emphasizing streaming over traditional DVD services, Reed Hastings was doing what he has always done best -- ensuring that his company does not fall prey to technological obsolescence. If Netflix made business mistakes -- a debatable point -- its instinct toward innovation wasn't one of them. It would be a huge mistake for companies to use the Netflix story as a reason to play it safe. Hastings has been quoted as saying he still believes that the company's future lies in streaming, and most analysts and investors would presumably agree. If the 800,000 customers who cancelled their subscriptions are too big a hit for Netflix to take, then Hastings may indeed be the pioneer who gets the proverbial arrow with no choice but to now engage in a tactical retreat. But I'd hate to see what our economy will look like in the next decade or two if companies in or out of the technological sector base their growth strategies on tactical retreats.