Reed Hastings: Netflix founder who looms over Hollywood

Reed Hastings turned Netflix – a DVD rental service rejected by Blockbuster – into a global streaming giant that has redefined the entertainment industry.

In 2010, The New York Times asked Jeffrey Bewkes, then the boss of Time Warner, whether he thought the threat posed by Netflix was exaggerated. That was like asking whether “the Albanian army” was “going to take over the world”, replied Bewkes. “I don’t think so.” 

For a while, co-founder Reed Hastings “wore Albanian army dog tags round his neck as motivation”, says The Times. “He doesn’t need to anymore.” Netflix’s subscriber base has now swelled to nearly 193 million paying members in 190 countries – more than any rival. Its shares were the top-performing major US stock of the 2010s and have surged another 50% this year, valuing it at around $215bn. These days, Netflix quite literally “looms over Hollywood”: the huge advertisement hoardings on Sunset Strip in Los Angeles “now tout offerings from just one entertainment superpower, because Netflix bought the billboards outright”.  

The Gates and Bezos generation

“With a laid-back air and a goatee that almost predates the internet,”, Hastings, 59, “is one of the Valley’s improbable survivors,” says the Financial Times – “the miscast impresario behind a Hollywood institution”. A techie who admits to seeing the world in “numbers and algorithms”, he hails from the generation of Bill Gates and Jeff Bezos. Hastings, who grew up in an affluent Boston suburb, describes himself as an “average kid with no particular talent”. But he hails from a family of achievers. His “polymath great-grandfather”, Alfred Loomis, “made an unlikely fortune” during the Wall Street crash, then invented a navigation forerunner to GPS – bankrolling a laboratory that attracted luminaries such as Albert Einstein. 

Hastings studied computer science at Stanford – where he “tried to patent a computer ‘foot mouse’” – then in 1991 founded his first company, Pure Software, which specialised in programs for measuring the quality of software. He made a small fortune selling Pure in 1996, then had the idea for a subscription service that offered DVD rentals by post after being whacked with a $40 late fee by Blockbuster. Netflix was launched in 1997 and caught on immediately – yet when Hastings attempted to sell it to Blockbuster for $50m in 2000, he was turned down. In 2007, “Netflix delivered its billionth DVD”, says Wired. The same year the company announced the launch of a revolutionary new “streaming service”. The rest is history.

Enough is not enough

Marc Randolph, who co-founded Netflix, once compared Hasting to Spock from Star Trek. He certainly seems to lack traditional “people skills”, says the FT. When he ousted Randolph, he laid out his partner’s “weaknesses in a PowerPoint demonstration”. Netflix’s “smash-the-conventions culture”, laid bare in a new book No Rules Rules, still divides the critics – some former staff have compared it to a cult. But Hastings sees it as central to the firm’s success. He’s always hired (and then frequently fired) “rock stars”, says Forbes, usually paying over the odds. But as a strategy it helped him crack Hollywood. 

Having revolutionised an industry, Hastings has pledged to stay on at Netflix until 2030. Why keep going? For him, enough still isn’t enough. “We are very much still in challenger status.”

Recommended

Great frauds in history: the Independent West Middlesex Fire and Life Assurance Company's early Ponzi scheme
Investment strategy

Great frauds in history: the Independent West Middlesex Fire and Life Assurance Company's early Ponzi scheme

The Independent West Middlesex Fire and Life Assurance Company (IWM) offered annuities and life insurance policies at rates that proved too good to be…
21 Oct 2020
Mukesh Ambani: the Indian billionaire eyeing global expansion
People

Mukesh Ambani: the Indian billionaire eyeing global expansion

Mukesh Ambani is already the richest man in India by a large margin, but his ambitions do not end there. He wants India to be at the front of the worl…
19 Oct 2020
Great frauds in history... John Factor’s penny-stock scams
People

Great frauds in history... John Factor’s penny-stock scams

John Factor sold worthless penny stocks through a boiler room operation, ramping the price via his financial newsletters. But he was never held to ac…
14 Oct 2020
Mohsin and Zuber Issa : garage tycoons who put Asda in their trolley
People

Mohsin and Zuber Issa : garage tycoons who put Asda in their trolley

The supermarket’s new owners are Mohsin and Zuber Issa, two brothers from Blackburn who started with a rundown petrol station 20 years ago. But their …
8 Oct 2020

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Negative interest rates and the end of free bank accounts
Bank accounts

Negative interest rates and the end of free bank accounts

Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK bankin…
19 Oct 2020
What would negative interest rates mean for your money?
UK Economy

What would negative interest rates mean for your money?

There has been much talk of the Bank of England introducing negative interest rates. John Stepek explains why they might do that, and what it would me…
15 Oct 2020