Saturday Jan 18th, 2020

How he was born: Netflix - Summary Story

The largest streaming platform (online streaming) was born much earlier than we think and in a totally different way.

How Netflix was born is nothing new. It all started in 1997, when Reed Hastings after returning a late DVD that he rented in Blockbuster (the giant of the films at the time) had to pay $ 40 dollars to return it late.

Hastings enraged with the value of the infraction, refused to pay that amount of money and began to mark a before and after in the movie rental system.

Reed Hastings set out to create a company that would not charge fines to its users for returning late films, but rather, a monthly fee for an unlimited number of rentals. At that time, Netflix delivered movies only in physical format through the mail, not on its page.

In a short time Hastings wanted to go further and revolutionize the film market, that is how he opened a digital portal and eliminated the costs of a store.

From 97 to the mid-2000s, Netflix failed to get close to the giant Blockbuster, which is why Hastings met with its manager to sell his small business.

But they refused to buy it because they did not need it and found that the “monthly subscription for unlimited content” model did not work, their “private movie rental” model was much better. Serious mistake.

If the purchase had been made, the transaction would have been 50 million dollars, today Netflix is ​​valued at $ 8500 million in the stock market.

On September 23, 2010, Blockbuster declared bankruptcy.

It is interesting to see how a visionary can defeat a company as giant as Blockbuster was and how the "ego", bad decisions and not valuing small skills can lead to bankruptcy.

What would have happened if Blockbuster had bought from Netflix?

Fuentes:

More content

Categories