Netflix CEO Profiled on Bloomberg TV’s ‘Game Changers’25 May, 2011 By: Erik Gruenwedel
Profile offers microcosm of home entertainment industry
Netflix’s prolific transformation from online disc rental pioneer to streaming trailblazer and Wall Street wunderkind wasn’t always a bed of roses, as depicted in an engaging Bloomberg TV profile of co-founder and CEO Reed Hastings.
Bloomberg TV's “Bloomberg Game Changers” is a documentary series that profiles tech titans, media moguls and related industry gatekeepers.
In addition to home entertainment industry analysts, Mitch Lowe, co-founder of Netflix and current president of Redbox, and John Antioco, former CEO of Blockbuster, talk about the battle between the Netflix and Blockbuster.
Hastings, a tech wizard and former Peace Corps volunteer, conceived the premise of founding Netflix after getting charged a $40 late fee for a Blockbuster movie rental.
“I remember I didn’t want to tell my wife about it,” he said. “And I thought, ‘Oh great, now I’m compromising the integrity of my marriage over this late fee.’ So of course I did tell her about it, but it made me think, ‘I can’t be the only one who is struggling with this late fee thing,’ and think about the Internet and DVDs and how something could work without a late fee.”
In fact, Los Gatos, Calif.-based Netflix in the early 2000s was hemorrhaging millions and considered just another pending dotcom bust in relation to VHS rental behemoths Blockbuster, Movie Gallery and Hollywood Video.
Netflix was marginalized to the point that Wedbush Morgan Securities analyst Michael Pachter called the company “a worthless piece of crap.” Pachter, who is called to task on making the comment in the documentary, now champions the company.
Of course it wasn’t until Walmart bowed its infamous $39 DVD player on Black Friday in 2003 that Netflix’s fortunes turned and the service became lightning caught in a bottle.
Notably, Antioco and Hastings in 2007 met privately at the Sundance Film Festival, where the two explored possibilities of a deal.
“His preference would’ve been for Netflix to buy Blockbuster online,” Antioco said. “What we proposed back was a merger.”
Bloomberg TV reports the meeting never got “beyond talks because of concerns about antitrust regulations. By 2008, Antioco was gone and Blockbuster backed away from its online business.”
Other humorous anecdotes include the time Blockbuster executives shipped Hastings a kitchen sink after he complained publicly the chain was throwing everything at him but the kitchen sink.
“At that point the rivalry was definitely established,” Antioco said.
See the full May 24 episode here.