Beyond the show — Netflix · Reed Hastings · 2007

You have a thousand mediocre titles, a working box, and a profitable business under attack. How do you launch streaming?

Netflix has about six million subscribers paying around $18 a month to have DVDs posted to them, revenue near a billion dollars, and its first real profits. Blockbuster has just launched a copycat service and is pricing it below yours. Broadband now reaches around half of American homes, YouTube has just sold to Google for $1.65 billion, and the studios will license you roughly a thousand old titles for internet delivery — no new releases, nothing you would build a service around. You have set aside about $40 million for streaming this year. Your engineers have also built a small set-top box that plays films from the internet on a television, and it is weeks from shipping. Every dollar you spend on streaming is a dollar not spent fighting Blockbuster on the business that actually makes money.

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