BY NOLA BOOTH

Reed HastingsFounder of Netflix

Before Netflix

Joined the Peace Corps after Grad School

Founded Pure Software in 1991 as an engineer, acompany based on a debugging tool for engineers

Became CEO of Pure Software in 1995

Pure Software purchased in 1997 by RationalSoftware for $750 million

Money from selling Pure Software used to foundNetflix

How Netflix Began

1997- Hastings receives a $40 late feefor Apollo 13, embarrassed

DVDs not yet on the market, still theage of VHS tapes

Idea begins with rental by mail, notsubscription based, minimal success

Decision to move on to subscriptionbased plan- people sign up to pay afixed amount per month for DVDrentals

Remarkable success, subscriptionrenewal rate after free Netflix trial at80% by 1999

Renewal rate up to 90% as ofJanuary 2009

How It Works

Users create a queue of the movies they want to watch

Users receive a movie in an envelope via mail that doubles as their return envelope

Users send back a movie to receive the next one on their queue

Several plans available after free trial period:

1 DVD at-a-time for $8.99 per month

2 DVDs at-a-time for $13.99 per month

…….

All the way up to 8 DVDs at-a-time for $47.99 a month!

Advancements and Plans for the Future

Almost every subscription includesunlimited online streaming ofmovies

An additional device, such as a Roku(shown to the left), can be used tostream select movies from Netflix to aTelevision

“We named the company Netflix(NFLX), not DVDs by Mail because weknew that eventually we would delivermovies directly over the Internet.DVDs will be around a long time, butwe’re building for the day when they’renot.”

-Reed Hastings

“Stay Flexible” -Hastings

So Why Do We Care?

So What?

I’ll Tell You!

Caters to “Americans’ love ofmovies [and] their love of notgetting off the sofa even to go tothe video store” (Patrick J. Sauer)

But perhaps more importantly…(or perhaps not):

Dealt with the late fee issue- WhenVHS tapes cost $70, or DVDs werenew, late fees were necessary

Now that DVDs sell for under $20brand new, late fee is a needlesspunishment

Pushed competing video storesto work harder and make customers’lives easier- beneficial for theconsumers!

In short…

But I don’t wanna.

Made our lives easier!

Works Cited

Abkowitz, Alyssa, comp. "How Netflix Got Started." Fortune 28 Jan. 2009. Fortune Magazine. CNN.Web. 21 Sept. 2009.<http://money.cnn.com/2009/01/27/news/newsmakers/hastings_netflix.fortune/>.

Andrews, Paul. "Videos Without Late Fees Reed Hastings, Digital Entrepreneur." US News & WorldReport 29 Dec. 2003: 64. Proquest LLC. Web. 21 Sept. 2009. <http://proquest.umi.com>.

Graham, Adam. "Video Stores Getting Squeezed by Internet, On-Demand." Detroit News [Detroit] 28Feb. 2005. Proquest LLC. Web. 28 Sept. 2009. <http://proquest.umi.com>.

Netflix. Web. 27 Sept. 2009. <http://www.netflix.com>.

Sauer, Patrick J., comp. "How I Did It: Reed Hastings, Netflix." Inc. 1 Dec. 2005. Inc. MansuetoVentures LLC. Web. 21 Sept. 2009. <http://www.inc.com/magazine/20051201/qa-hastings.html>.

Schlosser, Julie. "Netflix Makes It Big In Hollywood." Fortune 13 June 2005: 34. Proquest LLC. Web.21 Sept. 2009. <http://http://proquest.umi.com/>.

Svennson, Peter. "Netflix Delivers Internet Films to TV." Pittsburgh Post-Gazette [Pittsburgh] 24 May2008: A.9. Proquest LLC. Web. 21 Sept. 2009. <http://sks.sirs.com/>.

Image Credit

http://melsutton.files.wordpress.com/2009/03/netflix-logo.jpg

http://images.businessweek.com/ss/06/12/1229_resolutions/image/reed_hastings.jpg

http://blogs.pcworld.com/staffblog/archives/netflix-1.jpg

http://dpakman.files.wordpress.com/2009/03/netflix.jpg

http://www.teachwithmovies.org/guides/apollo-13-DVDcover.jpg

http://ace-filmeditors.org/blog/uploaded_images/roku_netflix_01_425-783960.jpg

http://www.post-gazette.com/images4/20070402wAPnetflixtwo_450.jpg

http://trainingfromabarkalounger.files.wordpress.com/2009/05/couchpotato.jpg

The End.