In ‘Netflixed,’ Gina Keating goes behind the scenes of ‘The Battle for America’s Eyeballs’
By Carl Kozlowski 10/11/2012
For millions of Americans, Netflix has become just part of everyday life, an easy way to watch practically any film under the sun without paying excessive rental fees. But think back to a time before this home-video rental service became ubiquitous, when it was just struggling to get a foothold in its David and Goliath battle against Blockbuster Video.
The battle to bring down America’s largest chain of home-video stores was launched back in 1997, when Silicon Valley entrepreneurs Marc Randolph and Reed Hastings teamed up to start an online DVD store at a time when most people didn’t even own a DVD player. They’ve come a long way since then, however, moving from the thrill of 150 sales on their launch day in 1998 to having more than 25 million current subscribers and more than $3 billion in annual gross sales.
Along the way they also entered the battle for domination in the streaming video arena against such giant competitors as Google, Hulu, Amazon and the nation’s largest cable companies and emerged triumphant. Yet, this is not just another dry story about the corporate world. Rather, it’s a colorful tale of outsized personalities and big visions that ultimately led to a split between Reed and Hastings, which acclaimed journalist Gina Keating recounts in her new book “Netflixed: The Epic Battle for America’s Eyeballs.” She will be discussing it and signing copies at 7 p.m. Monday at Vroman’s Bookstore in Pasadena.
“I covered the Netflix battles for seven years for [international journalism outlet] Reuters as an entertainment business reporter,” says Keating. “They were so accessible to me from the beginning, and I was able to see the whole arc of what happened between the two companies as well as what Wall Street said about it. It’s a real David and Goliath story that no one has covered as much as me, and it was so compelling to me that I just had to do it.”
Because Netflix was still relatively new at the time and Keating expressed a passionate interest, she had an unusual degree of access to the company from the beginning. While the challenge of creating her first book proved daunting at times, she had a “pent-up longing to tell a story from a very human angle” after focusing on the dry numbers side of the business for most of a decade.
Having never written anything longer than a 10,000-word article before, Keating knew that she had a lot of extra ground to cover to meet the standard 70,000 words that most books maintain. But after working with USC-based writing coach Stacie Chaiken, Keating discovered her way in was focusing intently on the men behind the Netflix battles and showing both their strengths and weaknesses.
“Seeing the poor decisions made by both Blockbuster and Netflix, I realized they arose from very human failings that led to the biggest mistakes between Randolph and Hastings,” says Keating. “I knew these guys and there was a big story getting left on the table that doesn’t take into account the human aspect of it.”
Indeed, the two titans who started Netflix had a falling out due to personality clashes and differences in business styles. Randolph provided the creative end of the company, while Hastings was the one “who took a messy idea and made it a beautiful machine.” But when Randolph opted to leave after several years, Keating found that the company’s sense of balance was lost for awhile, nearly causing it to join the list of failed video companies that it once triumphed over.
“Ultimately, Netflix should prevail from an operational standpoint,” says Keating. “There’s absolutely nothing wrong with that model. The weakness they have is that as he gets more successful, Reed Hastings is convinced he understands more about consumer behavior than he does.”
Gina Keating discusses and signs “Netflixed: The Epic Battle for America’s Eyeballs” at 7 p.m. Monday at Vroman’s Bookstore, 695 E. Colorado Blvd., Pasadena. Call (626) 449-5320 or visit vromansbookstore.com.