New book digs into Netflix's origins, evolution
Netflix is probably hoping a new book about its early history never gets made into a movie.
The book, "Netflixed: The Epic Battle for America's Eyeballs," tries to debunk a widely told tale about the company's origins and paints a polarizing portrait of its star, CEO Reed Hastings.
Set to go on sale Thursday, the book arrives at a pivotal time for Netflix Inc. The video subscription service is still recovering from a customer backlash triggered by Hastings' hasty decision to raise U.S. prices by as much as 60 percent last year. Investors remain leery of Netflix as its expenses for Internet video rights steadily climb. That's the main reason Netflix's stock remains about 75 percent below its peak of nearly $305 reached right around the time Hastings announced the price increases 15 months ago.
The book, written by veteran journalist Gina Keating and published by the Penguin Group, draws its insights from interviews with Netflix's lesser known co-founder, Marc Randolph, and other former employees. It also depends on information from former executives at Blockbuster Entertainment, the once-dominant video rental store chain driven into bankruptcy by the rise of Netflix and Redbox's DVD-rental kiosks.
Hastings declined to be interviewed for the book.
Keating nevertheless illuminates the competitive gauntlet that Netflix had to navigate to get where it is today. The book also dishes up juicy morsels about various negotiations that could have reshaped Netflix.
According to the book, Hastings and Randolph flew to Seattle sometime in 1998 to meet with Amazon.com Inc. CEO Jeff Bezos. The topic of discussion: a possible partnership. At one point, Hastings proposed that Amazon buy Netflix, only to be disappointed when Bezos offered a mere $12 million.
Netflix spokesman Jonathan Friedland told The Associated Press that the Amazon anecdote was "totally untrue." Amazon declined comment.
The book asserts that the Amazon talks weren't the only time that Hastings flirted with a possible sale before the company went public a decade ago.
In the spring of 2000, Hastings and other Netflix executives flew to Blockbuster's Dallas headquarters where they tried to sell Netflix for $50 million, only to be told the price was way too high, according to the book. That was one of many miscalculations Blockbuster made in its rivalry with Netflix. Despite its recent downfall on Wall Street, Netflix still boasts a market value of $4 billion
Blockbuster eventually built its own online DVD-rental service and began to hurt Netflix so badly that Hastings made an informal bid to buy his rival's roughly 3 million Internet subscribers for about $600 million, according to the book.
"People interpret history in all kinds of different ways, and a lot of the anecdotes in the book don't square with the way we remember them," Friedland said. "The gist of the story, that Marc and Reed created Netflix together, is correct."
Although the book sometimes casts Hastings in an unflattering light, Keating remains convinced he is the main reason that Netflix was able to transform home entertainment.
"I hope that people recognize he is a genius," Keating said in an interview with the AP. "There is no question in my mind that there is nobody like this guy. Wall Street and naysayers are wrong to bet against this company, especially as long as he is in charge."
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)