In this week’s issue of the New Yorker, there’s an intriguing profile about Netflix (NFLX) CEO Reed Hastings and his company’s boom.
The lengthy piece, penned by Ken Auletta, is an interesting deep-dive on how the streaming site maneuvered away from the edge of irrelevance to the dominant, Emmy-winning, Robin Wright-purveying entertainment powerhouse that it is.
It begins with Netflix’s bungled attempt to partner with Blockbuster in 2000 and talks with Mr. Hastings about his views regarding people’s dissatisfaction with the current television experience an impetus for its supersonic growth. There’s also some cameos by Silicon Valley heavyweights, like Marc Andreessen.
Unfortunately for cheapskates like us, it’s locked behind a paywall. So, we’ve boiled down some items of interest that we’ve learned from it and compiled them into a handy list. (In all seriousness, it’s worth grabbing a copy of the issue for the frame-worthy story art alone.)
1. The phrase “managed dissatisfaction” is a thing. People hate watching traditional television for a plethora of reasons, like commercials, claims Mr. Hastings. People’s disdain for the chaotic viewing experience can be summed up with the phrase “managed dissatisfaction” because Netflix offers what others don’t: a commercial-free, on-demand viewing experience.
He compared the site to books (those?) because “people get to control and watch, and you get to do all the chapters of a book at the same time, because you have all the episodes.”
2. Mr. Hastings feeds on Jeff Bewkes’ hate. Even though Netflix gained five million subscribers in two years, Time Warner CEO Jeff Bewkes discounted it was a threat in 2010. He scoffed that it’s like the “Albanian army going to take over the world? I don’t think so.” So, Mr. Hastings wore Albanian Arm dog tags around his neck for encouragement. “It was my rosary beads of motivation,” he said.
3. Qwikster was a disaster. Of course, that’s as obvious as calling the weather during a polar vortex “cold,” but when Netflix planned to divide the company into two (streaming and DVD delivery), the service lost 800,000 subscribers. Thank god for critical darlings like House of Cards that eliminated any memories of the undoubtedly company’s worst decision.
4. Netflix is betting on your children. Recently, the company made a pricey foray into creating original programming aimed at kids. The reason being is they want your kids to get hooked on Netflix and become lifelong customers. It’s a similar strategy Viacom employs by hooking kids onto Nick Jr. and clinging on to them until they die in front of a Friends marathon on older-focused TV Land.
5. It won’t stop growing. Mr. Hastings thinks he can double or triple its current subscription rate to 90 million within the next few years. It’s also only spending eight percent of its planned budget for original content, thus plans for new shows and documentaries are, cough, in the cards.