Books & Review | Cole Garner Hill
Updated: Oct 05, 2012 04:13 PM EDT

netflixed

Netflix’s CEO is often hailed as a “visionary” - Fortune named him Business Person of the Year in 2010. However, Keating’s portrait of the company's CEO is less flattering. (Photo : Barnes and Noble)

It's difficult to recall, but there was a time before Netflix existed. Remember? Every weekend spent savagely ransacking Blockbusters like pigs on a truffle hunt just to find the last available copy of "Bulletproof" starring Martin Lawrence. Hell. On. Earth.

That's symbolic of the impact Netflix has had on our popular culture. The company has become such a catalyst in the ever changing way we watch and consume media that we can only look at movie rentals in terms of pre-Netflix and after-Netflix. No matter how many streaming and DVD by mail services pop up - Amazon, Blockbuster, etc. - it has become the industry standard, the synecdoche - the market's "Kleenex" or "Coke."

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"Netflixed: The Epic Battle for America's Eyeballs" by Gina Keating analyzes how it all began. The story behind the company is marked by more drama than most of the movies Netflix carries, Keating asserts.

Netflix began in 1997 when two Silicon Valley entrepreneurs, Marc Randolph and Reed Hastings, decided to start an online DVD store before most people owned a DVD player. They were surprised and elated when launch-day traffic in April 1998 crashed their server and resulted in 150 sales. Today, Netflix has more than 25 million subscribers and annual revenues above $3 billion.

Keating recounts the duos turbulent ride to the top and attempts to create two new kinds of business: DVD by mail, and online video streaming. Netflix ushered in other innovations like a patented online queue of upcoming rentals, and a recommendation algorithm called "Cinematch" that proved crucial in its struggle against bigger rivals.

Netflix's CEO is often hailed as a "visionary" - Fortune named him Business Person of the Year in 2010. However, Keating's portrait of the company's CEO is less flattering.

Keating claims Hastings has little empathy for his own customers. "Reed Hastings is a genius, but some say he has an emotional temperature of zero." Keating said in an interview with Pasadena Star News.

"Randolph used Freud's theories about getting to consumers by appealing to our needs for love and sex. And the balance between these two guys is what made it work. But what seems easy now wasn't easy - you still were making a decision (in early online purchasing) that you had to wait for the results of. ... And, remember, no one knew what a 'shopping cart' was! People were still very reluctant to give out their credit card numbers online!"

Netflix also faces disgruntled customers after price increases and other stumbles that could tarnish the brand forever.

How did Hastings build such a big business if he didn't care to understand his customers? Keating suggests his co-founder, Randolph, who has been largely written out of the picture had a lot to do with Netflix's success.

"Netflix now is extremely different from Netflix when Marc Randolph was there. But the platform the founding team created and the attitude that they had about what they were doing -- that they were supposed to benefit customers first -- that was all Marc Randolph."

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