We had the privilege of working with some of the world’s most talented creators, including Shonda Rhimes, Joel and Ethan Coen, and Martin Scorsese.
Long ago, we had pivoted from our DVD-by-mail business to become not just an internet streaming service, with over 167 million subscribers in 190 countries, but a major producer of our own TV shows and movies around the world. Nominated for best picture and won three Oscars, a great achievement for the director Alfonso Cuarón, which underscored the transformation of Netflix into a full-fledged entertainment company. The year 2019 was also noteworthy for Netflix. Blockbuster had been unable to adapt from DVD rental to streaming. By 2019, only a single Blockbuster video store remained, in Bend, Oregon. Yet, by 2010, Blockbuster had declared bankruptcy. Moreover, Blockbuster was owned by Viacom, which at that time was the most valuable media company in the world. De- spite our growth, Blockbuster was still a hundred times larger than we were ($5 billion versus $50 million). In 2002, two years after that meeting, we took Netflix public. Why would a powerhouse like Blockbuster, with millions of customers, massive revenues, a talented CEO, and a brand synonymous with home movies, be interested in a flailing wannabe like Netflix? What did we possibly have to offer that they couldn’t do more effectively themselves?īut, little by little, the world changed and our business stayed on its feet and grew. That night, when I got into bed and closed my eyes, I had this image of all sixty thousand Blockbuster employees erupting in laughter at the ridiculousness of our proposal. Antioco listened carefully, nodded his head frequently, and then asked, “How much would Blockbuster need to pay for Netflix?” When he heard our response-$50 million-he flatly declined.
We suggested that Blockbuster purchase Netflix, and then we would develop and run as their online video rental arm. We all sat down around a massive glass table, and after a few minutes of small talk, Marc and I made our pitch. Eager to make a deal, we’d worked for months just to get Antioco to respond to our calls. That year alone, our losses would total $57 million. We had one hundred employees and a mere three hundred thousand subscribers and were off to a rocky start.
Marc and I had cofounded and now ran a tiny two-year-old start-up, which let people order DVDs on a website and receive them through the US Postal Service. Sporting a salt-and-pepper goatee and an expensive suit, he seemed completely relaxed.īy contrast, I was a nervous wreck. The CEO of Blockbuster, John Antioco, who was reputed to be a skilled strategist aware that a ubiquitous, super-fast internet would upend the in- dustry, welcomed us graciously. These were the headquarters of Blockbuster, then a $6 billion giant that dominated the home entertainment business with almost nine thousand rental stores around the world. Reed Hastings: “Blockbuster is a thousand times our size,” I whispered to Marc Randolph as we stepped into a cavernous meeting room on the twenty-seventh floor of the Renaissance Tower in Dallas, Texas, early in 2000. The following is an excerpt from a new book Hastings co-wrote called “ No Rules Rules: Netflix and the Culture of Reinvention.” For Hastings’ interview with “Marketplace’s” Kai Ryssdal, click here. Hastings credits much of this success to the company’s internal culture. Eventually, Netflix triumphed over Blockbuster, popularized streaming, and forced the entertainment industry to adapt. In early 2000, Netflix founders Reed Hastings and Marc Randolph offered to sell the company to Blockbuster for $50 million.