ABSTRACT

Reed Hastings reflected on the first half of 2008 as he drove through Los Gatos, CA on his way to Netflix headquarters. Netflix was still a growing and profitable company but several threats loomed on the horizon. Late in 2006, Blockbuster Entertainment had revamped its online movie rental site, renaming it Blockbuster Total Access. The commercials for Blockbuster Total Access were clearly aimed at stealing customers from Netflix.1 At the same time, new technology offered the opportunity to have movies delivered to customers directly through their cable television provider or over their computer. Either Blockbuster or this new technology could make the Netflix business model obsolete. Indeed, these new technologies led Business 2.0 to label Reed Hastings one of 2006’s “10 People Who Don’t Matter,” citing the availability of movies through cable or Internet as the future of movie rental.2