5 things I learned from The New Yorker’s feature on Netflix

Feb 03, 2014

FORTUNE -- There was nothing particularly new in Ken Auletta's highly readable article about Netflix (nflx) in the current issue of The New Yorker. (Here's a link to a snippet of the article; the rest is for paying subscribers.) The beauty of a Ken Auletta article, though, is that there doesn't need to be a ton of earth-shatteringly fresh information for it be worth your time to read. Auletta succinctly summarizes complicated topics, like how Netflix got to be what it is, and he name-checks all the most important people on a given subject so that by the time he's done, you're in the know, too.

A few nuggets that did pop out to me as noteworthy, whether or not they were new.

  1. In 2000, Netflix founder and CEO Reed Hastings offered to sell 49% of Netflix to Blockbuster and turn Netflix into Blockbuster.com. Blockbuster rejected the offer, thinking itself in the superior position, especially given the bursting of the tech bubble. Oops.
  2. Hastings told Auletta he has no hobbies. "I don't sail. I don't fish. I'm a pitiful failure as a Renaissance man." Knowing Hastings a little, that strikes me as a humblebrag. That Hastings would judge himself harshly as a Renaissance man merely speaks to his knowledge of the very concept, something 99% of the CEOs in Silicon Valley would find completely baffling. Check out this summary I wrote about a review of Hastings's college days to get a sense of why I'm not buying his self-assessment.
  3. Auletta writes that Netflix has "organized its library [of films] into seventy-nine thousand categories -- e.g. Foreign Sci-Fi & Fantasy; Dark Thrillers Based on Books -- to better predict what you might want to watch next." The number is staggering and likely so big as to be meaningless. But it points to Netflix's ambition to harness its data to serve its business interests and to understand its customers.
  4. Cindy Holland, Netflix's vice president of original content, told Auletta that the "average Netflix viewer watches two and a half episodes in one sitting," referring to the binge viewing of the hit series House of Cards. That's a lot of time for one video service to capture its customers.
  5. Hastings believes that Netflix's potential U.S. market is "sixty to ninety million subscribers," which is double or triple its current count. He also thinks half of all TV will be delivered over the Internet by 2016. The former is an ambitious goal, and it is interesting that Hastings and Netflix, unwilling to give out many kinds of data or predict where it's going next, would share it.
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