Perhaps nothing accurately sums up the legacy of Netflix co-founder Reed Hastings Commercial Dr. Pepper.
In the 30-second spot, a staple of live sports, a group of friends gather to watch a college football game — but, gasp, TV is disconnected from the streaming service. A mad scramble ensues to track down and painstakingly enter a paper coupon with the password via the arrows on the remote control. Once logged back in, the room exhales, but not before a fan lets out his frustration. “I miss basic cable,” he said in a hoarse voice.
During the company’s earnings call Thursday, Hastings, 62, said: He announced that he would abdicate His day-to-day role as co-CEO of Netflix to COO Greg Peters, who will continue to work alongside the company’s chief content officer, Ted Sarandos. The changing of the guard marks the end of an era for the streaming giant, which wouldn’t be an industry leader and cultural force without Hastings — who will continue as CEO of the company.
His departure was revealed in a mixed bag of calls based on it Netflix described as an increase in subscribers; This is after the company lost nearly 1.2 million subscribers in the first half of 2022 and blamed it on account sharing. In fact, the competition between streaming services has never been more intense, with runs running the gamut from HBO Max to Amazon Prime to NFL+. But none of them would be around if Netflix didn’t show up.
Hastings had no plans to take on the entertainment industry when he founded the company with Mark Randolph in the summer of 1997. Hastings, a computer scientist and mathematician, claims the idea was born out of panic — he was six weeks late returning a VHS rental of Apollo 13 and was struggling with how to explain the $40 late fee. dollars for his wife. Wonder why video rentals can’t function like a gym membership, where subscribers watch as little or as much as they want. Randolph replies that he and Hastings have considered the idea of Netflix together.
The business they eventually launched was like a strange derivative of Columbia House – a service that allowed customers to browse an online catalog and rent movies by mail for a subscription fee. This was great stuff at the turn of the century, when there was at least one video store in every neighborhood and Amazon was a humble bookseller.
Hastings, who was going to invest $2.5 million in the startup from a software company he founded and sold, didn’t expect his library of 925 books to be shared by so many. But people took to it so eagerly that two months later, Jeff Bezos offered to buy the company from Hastings and Randolph for $16 million. In September 2000, after the dot-com crash stunted growth, Hastings and Randolph nearly sold Netflix back to Blockbuster for $50 million. Blockbuster, convinced the offer was a joke, declined.
Soon enough, Netflix was shipping 1 million DVDs a day, raking in over $500 million in revenue, and blockbuster and mom-and-pop video stores were churned out. Before Amazon, an online shopaholic at this point could show up on Netflix’s market share, Hastings, inspired by YouTube, prompted the company to branch out into streaming video. In a short time, her library has spread from 1,000 titles to nearly 6,000 in the United States alone. Under Hastings, Netflix has moved from signing content distribution deals with TV and movie companies to creating original content.
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Hastings helped turn Netflix into a one-stop shop. It aired hot movies within weeks of their box office debut, as well as hit original TV series including Orange Is the New Black and cherished network hits like The Office. Samsung and Sony have pushed to integrate Netflix and other major streaming devices into their TV lineups. Before Netflix, we were taxed at set-top boxes, bogged down with too many remotes and at the mercy of customer support from Time Warner and the like. It took Hastings to show us that television doesn’t have to be that complicated. It could be on a phone or tablet.
Unfortunately for Hastings, Netflix has become a victim of its own success. Not only has Hollywood studios been pushed into the streaming business, but so have tech competitors like Amazon and Apple. Where Netflix was synonymous with streaming, now it’s one of a handful of options and no longer the best of the bunch.
As Netflix grew and made Hastings a billionaire, he was struggling to navigate criticism for pulling an episode of the topical comedy show Patriot Act with Hasan Minhaj in which the host roasted the Saudi crown prince, Mohammed bin Salman, and for continuing to bankroll Dave Chappelle and other comedians who have courted controversy on their own shows. Hastings’ reply—”We’re not trying to speak truth to power. We’re trying to entertain”—only made him sound like another out-of-the-ordinary businessman.
As Silicon Valley leaders go, Hastings is more Tim Cook than Elon Musk, a pragmatist at his core. The legacy he left behind is enormous. Before Hastings came along, watching television was a passive experience. Thanks to him, viewers have more remote control than ever before – whether they like it or not.