1. Reed Hastings
Founder of Netflix
BY NOLA BOOTH

2. Before Netflix
 Joined the Peace Corps after Grad School
 Founded Pure Software in 1991 as an engineer, a
company based on a debugging tool for engineers
 Became CEO of Pure Software in 1995
 Pure Software purchased in 1997 by Rational
Software for $750 million
 Money from selling Pure Software used to found
Netflix

3. How Netflix Began
 1997- Hastings receives a $40 late fee
for Apollo 13, embarrassed
 DVDs not yet on the market, still the
age of VHS tapes
 Idea begins with rental by mail, not
subscription based, minimal success
 Decision to move on to subscription
based plan- people sign up to pay a
fixed amount per month for DVD
rentals
 Remarkable success, subscription
renewal rate after free Netflix trial at
80% by 1999
 Renewal rate up to 90% as of
January 2009

4. How It Works
 Users create a queue of the movies they want to watch
 Users receive a movie in an envelope via mail that doubles as their return envelope
 Users send back a movie to receive the next one on their queue
Several plans available after free trial period:
 1 DVD at-a-time for $8.99 per month
 2 DVDs at-a-time for $13.99 per month
 …….
 All the way up to 8 DVDs at-a-time for $47.99 a month!

5. Advancements and Plans for the Future
 Almost every subscription includes
unlimited online streaming of
movies
 An additional device, such as a Roku
(shown to the left), can be used to
stream select movies from Netflix to a
Television
“Stay Flexible”
-Hastings
“We named the company Netflix
(NFLX), not DVDs by Mail because we
knew that eventually we would deliver
movies directly over the Internet.
DVDs will be around a long time, but
we’re building for the day when they’re
not.”
-Reed Hastings

6. So Why Do We Care?
So What?

7. I’ll Tell You!
 Caters to “Americans’ love of But I don’t wanna.
movies [and] their love of not
getting off the sofa even to go to
the video store” (Patrick J. Sauer)
But perhaps more importantly…
(or perhaps not):
 Dealt with the late fee issue- When
VHS tapes cost $70, or DVDs were
new, late fees were necessary
 Now that DVDs sell for under $20 In short…
brand new, late fee is a needless
punishment
Made our lives easier!
 Pushed competing video stores
to work harder and make customers’
lives easier- beneficial for the
consumers!

8. Works Cited
 Abkowitz, Alyssa, comp. "How Netflix Got Started." Fortune 28 Jan. 2009. Fortune Magazine. CNN.
Web. 21 Sept. 2009.
<http://money.cnn.com/2009/01/27/news/newsmakers/hastings_netflix.fortune/>.
 Andrews, Paul. "Videos Without Late Fees Reed Hastings, Digital Entrepreneur." US News & World
Report 29 Dec. 2003: 64. Proquest LLC. Web. 21 Sept. 2009. <http://proquest.umi.com>.
 Graham, Adam. "Video Stores Getting Squeezed by Internet, On-Demand." Detroit News [Detroit] 28
Feb. 2005. Proquest LLC. Web. 28 Sept. 2009. <http://proquest.umi.com>.
 Netflix. Web. 27 Sept. 2009. <http://www.netflix.com>.
 Sauer, Patrick J., comp. "How I Did It: Reed Hastings, Netflix." Inc. 1 Dec. 2005. Inc. Mansueto
Ventures LLC. Web. 21 Sept. 2009. <http://www.inc.com/magazine/20051201/qa-hastings.html>.
 Schlosser, Julie. "Netflix Makes It Big In Hollywood." Fortune 13 June 2005: 34. Proquest LLC. Web.
21 Sept. 2009. <http://http://proquest.umi.com/>.
 Svennson, Peter. "Netflix Delivers Internet Films to TV." Pittsburgh Post-Gazette [Pittsburgh] 24 May
2008: A.9. Proquest LLC. Web. 21 Sept. 2009. <http://sks.sirs.com/>.

9. Image Credit
 http://melsutton.files.wordpress.com/2009/03/netflix-logo.jpg
 http://images.businessweek.com/ss/06/12/1229_resolutions/image/reed_hastings.jpg
 http://blogs.pcworld.com/staffblog/archives/netflix-1.jpg
 http://dpakman.files.wordpress.com/2009/03/netflix.jpg
 http://www.teachwithmovies.org/guides/apollo-13-DVDcover.jpg
 http://ace-filmeditors.org/blog/uploaded_images/roku_netflix_01_425-783960.jpg
 http://www.post-gazette.com/images4/20070402wAPnetflixtwo_450.jpg
 http://trainingfromabarkalounger.files.wordpress.com/2009/05/couchpotato.jpg
The End.