Netflix vs. Blockbuster Total Access
modest proposal (via Dare Obasanjo):
Blockbuster couldn’t find a way to overcome Netflix head to head. But market research showed ability to combine rental by mail with in store was a game changer.
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Total Access grabbed 1M subs in two months and was taking over 100% share. Netflix modeled that it was bankrupting Blockbuster
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Hastings told Antioco he was spending the company into ruin and offered to buy Blockbuster Online subs. He later followed up with $200/sub offer. Antioco demurred, realizing he had Netflix on the ropes.
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At Blockbusters Board meeting. Antioco suggested they turn down the offer. The Board agreed. Then turned to his comp. He had hit the targets set by the Comp Committee so expected perfunctory approval. Icahn exploded.
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TL,DR: Antioco quits, and against all logic instead of hiring the COO, Icahn hires an ex 7-11 retail guy whose plan is to do everything that Blockbuster already tried and failed at. After he laid out his plan, the entire exec team sold most or all of their stock next open window! […] Not only did the Blockbuster execs sell all their stock, they bought Netflix stock!
Carl Icahn has also tried to tell Apple what to do, before he sold all his shares. The excerpts are from the book Netflixed.
Alternatively, a great podcast version of the history of Netflix here.
Update (2019-09-25): Minda Zetlin (via Hacker News):
In his new book That Will Never Work, Netflix co-founder Marc Randolph describes a meeting he attended with Antioco along with Netflix co-founder Reed Hastings and its then-CFO Barry McCarthy at Blockbuster headquarters in Dallas. Everyone from Blockbuster who was at that meeting must cringe when they think back on it now. The company could have bought Netflix that day for $50 million, but its CEO didn’t even bother to consider the possibility. He seemed to see it as a great big joke.
See also: The inside story of how Netflix transitioned to digital video after seeing the power of YouTube.
2 Comments RSS · Twitter
@Dillan Fixed; thanks.
Fix your link to modest proposal