Netflix & Kill

How CEO Reed Hastings disrupted the subscription-entertainment industry and built a $170-plus billion empire.

- Hugh Garvey

By many accounts, Reed Hastings had lost his mind. The year was 2011, and the Netflix co-founder and CEO had just made a decision that cost him 8,00,000 subscribers in one quarter. The company’s stock price plummeted 35 percent. The market was punishing Hastings’ company for raising its subscription prices 60 percent, and splitting the streaming and DVD-delivery service into two separate subscriptions. The Huffington Post called the move “monumentally stupid,” and a headline on Mashable compared it to the ‘New Coke’ debacle.

This was what anyone would call, in polite terms, a teachable moment, and Reed Hastings was the rare leader who possessed the intelligence and humility to be taught. Within a month he had reversed the decision to split the service in two, but he kept the price hike. It turned out to be the right move. At the time, Netflix stock was trading at $77.50 a share. Today, it’s worth $400.

Iterative and pivot are clichéd terms in the tech industry, and both moves can be fatal without focus and vision. Hastings, 57, has the uncanny ability to execute on all four fronts, consistently. He beat Blockbuster’s location-based, pay-per-rental game by offering to mail DVDs at a flat monthly rate. He took YouTube’s streaming success, paired it with HBO’s premium-content branding, and outspent everyone for top talent to become the head of a $170plus billion juggernaut that has upended how we consume filmed entertainment, and is now one of the fastest-growing companies in the world. We can thank him for inventing binge-watching, funding much of the golden era of television, and introducing international gems like the hit Japanese reality show Terrace House and India’s own