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Listened to the first episode of @pkafka Land of the Giants about $NFLX.... big whoas...
$NFLX tried to sell itself to Blockbuster for $50M in 2000 so they could run the Blockbuster online biz....
$NFLX tried to sell itself to Blockbuster for $50M in 2000 so they could run the Blockbuster online biz....
And then Blockbuster came back with its own mix of online/offline offering at a cheaper monthly price.... they were on the verge of beating Netflix... Reed Hastings later said they had them in "check mate"...
...but(!) then:
(1) Viacom spun out Blockbuster and put an extra $1B in debt on their books as a spin off parting gift and
(2) Carl Icahn bullied his way on to the Blockbuster board and forced them to abandon their online (NFLX competitor) service to save money (!!!)....
(1) Viacom spun out Blockbuster and put an extra $1B in debt on their books as a spin off parting gift and
(2) Carl Icahn bullied his way on to the Blockbuster board and forced them to abandon their online (NFLX competitor) service to save money (!!!)....
And Blockbuster went bankrupt less than a year later after the GFC....
Not activism's finest moment!
But also shows how an online/offline model could have potentially beaten back some hot young start-up pushing the Innovator's Dilemma narrative....
Not activism's finest moment!
But also shows how an online/offline model could have potentially beaten back some hot young start-up pushing the Innovator's Dilemma narrative....
So when people poo poo LULU for buying Mirror because they "don't know how to do digital"... I say "not so fast"
If not for dumb dumb Viacom and Icahn, Antioco gets celebrated like a hero for the next 20 years, feted at Harvard b-school, and on CNBC... And Reed Hastings goes on to start the next Pure Software....
Obviously Reed is brilliant and deserves all his accolades... but success is sometimes so razor thin... and the truly self-aware successful CEOs like Reed know this....
It's like playing a video game... you survive... you get to the next level... you die, you don't... if you get killed on level 46 the first time you play it, vs getting past it on your 7th attempt, were you skilled or lucky?
If u make it thru a 100 levels of the video game, whether by luck or skill, you will be celebrated...u will have books written about you...u will be invited on to 100s of podcasts to spew out your pearls of wisdom about succeeding in life (or politics!)whether you should or not
And.... never forget: The extra $1B of debt (taking it to $2B in debt) is what killed Blockbuster in 2008/9....
Netflix currently has $16B in debt and could likely borrow much much more... and a nominal interest rate.....
Play the game on the field....!
Netflix currently has $16B in debt and could likely borrow much much more... and a nominal interest rate.....
Play the game on the field....!
