Reed Hastings had to pay Blockbuster $120,000 fine for not returning a movie, this would spur him to create his own rental movie
One summer in 1995 in Boston, Reed Hastings walked into the Blockbuster warehouse, his only mind being to rent the just-released Apollo 13 movie. Once he finished the great movie by Tom Hanks and Kevin Bacon, he forgot he had a maximum of 3 days to get it back with what he didn’t count on is that he was fined. It was pointless to argue with the official, Hastings had to pay $40 – $120,000 –
He left Blockbuster and decided he would never come back, but with a hot idea in his head, a mail-order DVD movie rental system that doesn’t fine its customers and save them the hassle of leaving their homes would be ideal. Hastings had what it took to make it work, as in 1983 he graduated in mathematics from Bowdoin College and earned a master’s degree in computer engineering from Stanford University. In addition, he had a broad view of the world, and frequently traveled with the Peace Forces—founded by John F. Kennedy—to teach mathematics and engineering. Traveling through the most remote places in Africa, you came to the conclusion of how important it was for people to have a TV, wherever they go, in the middle of nowhere, TV was the most valuable possession of every society.
For Hastings, he created a virtual catalog of movies that users could order, sort of Online video club. Customers will pay a cheap monthly subscription and will have unlimited access to the entire catalog, the movie they choose will be delivered straight to their home and when they return it they can order a second subscription. Hastings never imagined that what started out as revenge would end up with Blockbuster and the movie rental companies going bankrupt. Along the way he met a businessman like him, Mark Randolph, they joined in building the venture they launched on April 14, 1998 with only 30 employees and a thousand DVDs available for rent in netflix.com.
Two years later, partners and later close friends decided to do the unthinkable, and called the owners of Blockbuster, which at that time had 9 thousand stores around the world, to make it a tempting offer. They offered him netflix.com for 50 million dollars. Although the new millennium brought changes that included a boom in the digital age, Blockbuster rejected the entrepreneurs’ proposal. They will regret it when, ten years later, they declare bankruptcy with debts of more than a billion dollars.
By 2002, Netflix was public, and had more than 4 million subscribers, but co-founder Marc Randolph decided to get off the boat and leave Netflix, giving Hastings credit for the company’s success. Since then, Randolph has dedicated himself to helping young entrepreneurs with a business model so they don’t die trying.
Despite Netflix’s success, 2007 was a watershed year for the company, with some considering it to be Its real revolution. Before the competition, they introduced broadcasting, and their customers could watch movies and TV series on the computer. They will no longer have to wait days for a courier to knock on their door, now the entire catalog is available with just one click. In addition to computers, Netflix offered streaming via XBOX, PS3, Blu-ray, and TV set-top boxes. The numbers speak for themselves: it went from 4 million subscribers to 8 million in 2008. Today, there are already 140 million connected users worldwide.
In 2011, Netflix expanded outside the United States, launching in Latin America, the Caribbean, Europe, and Canada. Thinking of continuing to innovate, Hastings is betting on creating his own content. His first series is house of paperDirected by David Fincher and starring Kevin Spacey. Two years after its premiere, it received 31 Emmy Award nominations. Today, Netflix is the most growing American brand, not to mention the impetus that the pandemic has given it. 16 million subscribers have been added to its platform thanks to the virus, the largest increase in a quarter in its 13-year history. In March 2020, Netflix received more Academy Award nominations than any other production company.
Twenty years after founding Netflix, Hastings disappointed his loyal fans when he recently admitted during a conference that his story about the $40 fine imposed by Blockbuster that prompted him to create his own company was candid. Marketing strategy A lie he thinks will be helpful in stimulating an idea that has been cooking in his head for years.
newly Hastings admitted that the Blockbuster story that led him to create the company was wrong
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