Founding of Netflix
In 1998 Hastings and Marc Randolph co-founded Netflix, offering flat rate rental-by-mail to customers in the United States. Headquartered in Los Gatos, California, Netflix has amassed a collection of 100,000 titles and over 20 million subscribers. "I got the idea for Netflix after my company was acquired," said Hastings. "I had a big late fee for 'Apollo 13.' It was six weeks late and I owed the video store $40. I had misplaced the cassette. It was all my fault. I didn’t want to tell my wife about it. And I said to myself, 'I’m going to compromise the integrity of my marriage over a late fee?' Later, on my way to the gym, I realized they had a much better business model. You could pay $30 or $40 a month and work out as little or as much as you wanted."
Hastings said that when he founded Netflix, he had no idea whether or not customers would use the service. "Netflix was originally a single rental service, but the subscription model was one of a few ideas we had—so there was no Aha! moment. Having unlimited due dates and no late fees has worked in a powerful way and now seems obvious, but at that time we had no idea if consumers would even build and use an online queue."
Read more about this topic: Reed Hastings
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