The inside story of Netflix's incredible rise and uncertain future as master of the video universe Netflix has come a long way since 1997, when Marc Randolph and Reed Hastings decided to start an online DVD store before most people owned a DVD player. Yet its long-term success-or even survival-is still far from guaranteed. Journalist Gina Keating recounts the fast-paced drama of the company's turbulent rise to the top and its attempt to invent two new kinds of business. First it engaged in a grueling war against videostore behemoth Blockbuster, transforming movie rental forever. Then it jumped into an even bigger battle for online video streaming against Google, Hulu, Amazon, and the big cable companies. Drawing on extensive interviews and her years covering Netflix as a reporter, Keating makes this tale as absorbing as it is important.
Before Amazon disrupted the retail industry, Netflix was the bête noire of the movie industry. Marc Randolph and Reed Hastings co-founded a movie rental service that simply sent discs by mail. The business took off because customers loved a subscription model with no late fees.
As Netflix built the customer base and expanded its movie library, business growth accelerated and the entrenched movie rental retailer Blockbuster was forced to respond. In 2000, Hastings first struggled to win a partnership with Blockbuster, but after several rebuffs he went on to chart an independent course with devastating impact on the largest movie retailer at the time.
In an interview with Readara, award-winning author Gina Keating discusses what led to the rise of Netflix and how the movie rental industry slowly shifted to mail order before launching streaming services. Keating goes on to explain how the digitization and the rapid spread of the Internet led to the fall of the once-mighty retail empire of Blockbuster with its thousands of stores, millions of customers and strong marketing strategies.
In 2004, four years after Netflix was launched, John Antioco, CEO of Blockbuster, realized that Netflix and Redbox are posing a serious threat to the company. After eliminating the annoying late fees that also generated nearly $200 million in profits, he decided to invest an additional $200 million in online operations. However, in 2005, activist shareholder Carl Icahn fired the retail veteran who was taking all the right steps in countering the Netflix threat.
Netflix invested heavily in following and understanding online customer behavior and leveraged that knowledge by building a movie library and improving customer experience. Yet, the final chapter of the company may not be written, as Amazon pursues Netflix customers with a growing library of movies and other offerings at even cheaper subscription prices.
Gina Keating is the author of Netflixed: The Epic Battle for America’s Eyeballs (Portfolio, 2012) and a freelance writer. She covered media, law and government as a staff writer for Reuters and United Press International in Los Angeles.
The Greater Los Angeles Press Club named her its Print Journalist of the Year in 2001. The same year, she won the Press Club’s award for investigative reporting and the California Teachers Association’s John Swett Award for excellence in education-related journalism for stories she wrote for the Los Angeles Daily Journal.
Prior to moving to Los Angeles, she covered the Texas Legislature, business and culture as a freelance writer for the Associated Press, UPI, the Austin American-Statesman, and Texas Monthly, Food and Wine, Southern Living and Forbes magazines. Her freelance work also has appeared in Daily Variety.
She lives in Los Angeles.
“Keating separates fact from legend in this story of how the tiny upstart, Netflix, took on and ultimately decimated the goliaths of the industry, Blockbuster Video and Hollywood Video… It seems that only Apple Computer rivals Netflix in how its customers hold a deep personal attachment to the brand “experience,” and fans of the service will get a lot of insight into how much risk, dedication, and commitment it took to bring that experience into being.”
“…Veteran media journalist Keating’s nonfiction debut is a surprisingly swift-paced mix of investigative journalism and thrillerlike suspense. The major players in the game—Netflix CEO Reed Hastings and Blockbuster’s John Antioco—are both complicated characters, and Keating does a commendable job painting a portrait of these very different business leaders, each with his own unique approach to vying for the same brass ring: domination of the American home-entertainment market …An impressive look at the infinite complexities and cutthroat competition driving the deceptively simple business of 21st-century movie delivery.
“Netflixed has all the drama and intrigue of a Hollywood blockbuster, but for me, it was also nostalgic. Gina Keating perfectly captured the pressure, energy, and emotion we all felt as we fought Netflix for control of America’s living rooms. I’m often asked by people, ‘What happened at Blockbuster?’ Now I can tell them . . . just read Netflixed.”