Few know that, in the summer of 1998, Netflix its future was at stake in a meeting that brought its founders, Reed Hastings and Marc Randolph, face to face with Jeff Bezos, The CEO of Amazon, the e-commerce giant.
A ‘no’ to a millionaire business proposed by Bezos was, perhaps what saved Netflix from disappearing from the map and what eventually led it to become the successful entertainment and subscription service company
(You may be interested in: So you can learn English and other languages through Netflix)
The details of this Netflix Vs. Amazon, which occurred more than 20 years ago, are described in great detail in the book. “This will never work: the birth of Netflix and the amazing life of an idea “, Written and published by Marc Randolph in 2019. The story has also been told in media such as CNBC Make It.
An unexpected call
Netflix had about a year founded and a few months of operation as a DVD movie rental company competing with Blockbuster.
Hastings and Randolph managed with a website and a series of agreements with DVD makers to keep the business afloat, when, in the summer of 1998, they received a call.
“Jeff (Bezos) wanted to meet us,” Randolph told CNBC in an interview.
Although Amazon at the time was far from the most valuable brand in the world and that Jeff Bezos became the richest man in the world, Was not just any company. Randolph notes in his book that, with four years of operations, Amazon was already making $ 100 million in annual revenue from the sale of books and had about 600 employees.
(Besides: Do you know how many millions of dollars Netflix just earned?)
These figures motivated Randolph and Hastings to fly to Seattle to meet with Bezos. However, they foresaw what the nascent e-commerce player had in hand.
“They wanted to be a ‘store of everything.’ That was never going to work,” Randolph wrote in his book. At the time, Amazon was looking to acquire different types of businesses to expand, and surely the video market was an attractive option.
When Netflix co-founders arrived at Amazon’s offices they were met with a surprise. “We walked into an office that was a pigsty. People were cramped there. The desks were old wooden doors and Jeff (Bezos) was in an office with four more people,” Randolph explains.
There, they offered to buy Netflix for an “eight-figure amount.” “That could mean something between $ 14 million and $ 16 million.”, Randolph wrote in his book.
It was an attractive proposal for a company that had only been working for a few months and for both employers. At the time, Randolph owned 30% of the company and Hastings 70%.
(Continue reading: Netflix in quarantine, so was the 2020 ‘stream’ platform)
The book reveals what the two of the offer thought. Hastings is said to have thought, at the time, that Netflix had much greater potential in the offering that Bezos made to them.
Randolph, on the other hand, felt good about having that money. After all, the profitability for the rental model was no greater and the costs of the business were high.
On the return flight, both partners evaluated pros and cons and decided, in the end, that it was not the time to step aside. Upon landing, they called Amazon and rejected Bezos’ proposal.
Although there was no purchase, the Business Insider portal does say that in Randolph’s memoirs there is a brief association between Netflix and Amazon. Netflix included links for customers to purchase DVDs from Amazon, and in turn Amazon referred to links to wash movies on Netflix. But even though, Randolph says in his book, the business was successful for Amazon, it wasn’t so much for Netflix. The alliance ended and each of the companies went their own way.
This’ no ‘to Jeff Bezos’ proposal and the distance the two companies took was a defining part of Netflix’s history.. Today, these $ 14 million or $ 16 million purchase offer from Amazon is nothing compared to the position that today’s leader in subscription audiovisual content holds.
(You might like: 50 recommended movies to watch on Netflix, Amazon, HBO and Disney +)
According to the latest reports, Netflix closed 2020 with a profit of $ 2.671 billion. And, according to Forbes indicators, Netflix’s revenue is in the order of $ 21.4 million and to date has 8,600 employees.
On Forbes ’recognized charts, Netflix ranks 26th in the ranking of the World’s Most Valuable Brands in 2020.
In addition, just over a week ago, it was confirmed that Netflix had surpassed 200 million subscribers by the close of 2020.
THE WEATHER