Brent Lang
March 20, 2025
Variety
“No late fees.”
When Netflix launched as a DVD rental service in 1998, that was its most effective pitch to potential customers — an unmistakable reference to the thing that people hated the most about Blockbuster. With more than 9,000 locations, Blockbuster was the biggest video rental chain in the world, but it was alienating members because its profits came from charging hefty fines for movies that weren’t returned on time.
“It was an obvious sore spot,” Reed Hastings, Netflix’s co-founder, says. “People loved renting movies and watching them at home, but the late fee became the symbol of everything painful about that model. So we decided to create something different.”
Netflix didn’t just do away with late fees by allowing customers to keep movies for as long as they wanted. It offered subscribers unlimited rentals for a monthly flat fee. As a bonus, it delivered DVDs directly to customers’ homes, eliminating the hassle of having to drive to the local Blockbuster to scour aisle after aisle of movies in search of something to watch.
That gamble paid off. Twenty-eight years after it debuted with little fanfare, Netflix, now under the leadership of Hastings’ successors, Ted Sarandos and Greg Peters, dominates Hollywood. Its market cap of $392.68 billion surpasses those of Disney, Warner Bros., Discovery, Paramount Global, and Comcast combined.
Reed Hastings on Ted Sarandos committing to spending $100 million on House of Cards, picking the show up for an unheard-of two seasons, before a pilot had even been shot, and agreeing not to give David Fincher any notes and guaranteeing him full creative control:
“I wasn’t comfortable with it. It seemed perilously aggressive to me, just on the edge of reckless. We’d been working together for a decade, so I’d come to trust Ted’s instincts. But they were definitely not my instincts.”
