Netflix

VO: Get ready for your semi-regular dose of random ideas from the guys at Codelation. We like to talk about big ideas companies that are winning, and those that aren't along with current events in our crazy world of software startups. So come along with Erick and Josh, who challenge you to think big, start small and turn your ideas into something on this episode of, from idea to done.

Josh: Welcome to the first profile episode of idea to done in our profile episodes. We talk about how a company's idea has evolved and changed our lives. Hi, I'm Josh.

Erick: And I'm Erick and today's big idea. We're going to talk about on-demand entertainment, AKA Netflix.

Josh: So Netflix, it was founded in 1997. Uh, I don't know if most of our listening audience out there remembers 1997, but it started off with DVD sales and rental by mail. It's not the behemoth that we know today.

Erick: And I remember I liked it, but I hated it when I first got it because I would rent seasons at a time and I'd want to binge watch things, but that wasn't a thing yet. And so I'd get one disc and then I would have to wait five days until this two showed up and it was infuriating. What was, what was your 97? Kind of like

Josh: 1997 for me was, Hmm. I remember Chris Farley had overdosed in 1997. Um, what was, what else happened in 1997? Yeah. You know,

Erick: And I remember it was princess Diana died and the bigger problem at our house with that was we had to try to find the princess Diana beanie baby. Oh yeah. But then we got, I don't know if we still have those beanie babies. They're probably worth some, it's not really money. I don't know who said that those were going to be worth money, but that's a great marketing scheme. I think

Josh: Whoever's selling them, but, but yeah, 1997, I remember in 19 98, 99, I was actually working for blockbuster. And there's this really crazy thing of blockbuster. When you go to rent a VHS tape, well, first you had to rewind it to bring it back, you know, please be, please be kind rewind. And then also DVDs were starting to grow at that time. But I remember that, uh, blockbuster didn't actually own the VHS tape. And so if you lost one of the tapes, you would end up only blockbuster like 150 bucks because it was still owned by the, the production studio.

Erick: And this is news to me today. I, I had no idea that that's how it ran. And, and so yeah, we're doing our, pre-show kind of like, you know, planning it out. And I learned something new today that is wildly irrelevant. Anyway.

Josh: So you went to a point to where you, you couldn't actually get the VHS tapes at target or best buy or Sam goody or whatever things don't exist anymore. Um, but in 1998, they did fast forward. A couple of years, blockbuster actually tried to buy Netflix for $50 million in the year 2000. Um, and obviously they said no,

Erick: And, and that was, that was crazy at that time. But you

Josh: Have a bunch of startups like Netflix and Amazon that are just losing money, hand over fist. You've got the.com bubble of, of 2000 happening. But what, what triggered this, what Netflix is able to see through is that in the mid two thousands bandwidth speeds allowed for online streaming to start happening. We went from dial up modems to DSL lines, to cable modems, and starting to get actually enough speed to where you could stream a movie in real time. And right at the time of that online streaming that was happening, blockbuster had over 9,000 stores across the U S uh, in 2004.

Erick: And since then, that that was the end. That was their bubble burst. You know, all the other internet companies, they were bursting and Netflix is, Nope, we're not going to do that. And as of January, this year, they have 139 million paid subscribers. And 60 of those are just in the U S

Josh: So one, one fifth of everyone in the U S has a Netflix account, but

Erick: There's, there's one blockbuster left in bend Oregon. And so then that's,

Josh: That's kind of crazy to think. So blockbuster went from 15 years ago, from 9,000 stores to one. And Netflix went from really nothing seven years earlier to 139 paid subscribers.

Erick: And it was, what's crazy about that. It was just taking the same principle basically, but they were just using the mail and, and they knew what was coming though. And I think that that's an important thing because you kind of, they knew what was coming and they adapted before the rest of the world. And now they're, you know, they shifted, they took over the entire rental space and now they're taking over like entertainment as a whole. And everyone has creative freedom that you don't have to jump through a hundred hoops anymore. And that's exciting for me.

Josh: Well, you got kind of crazy things that happen. I mean, this year bird box came out to where brands are now posting on social media, that you shouldn't, uh, blindfold yourself and try to use, use their product. You know, there's a hoverboard or a bike or whatever it is. You just think of the reach that 22 years ago, this little company that started with the idea of revolutionizing media is now producing their own content.

Erick: And, and to be on the good side of that, like I've watched Dave Letterman my whole life. And he is actually, he's been a, he's a hero of mine. And I watch the late show with David Letterman with Allen Carter. Yeah. Alan Coulter. And he was the guy. And now I watch my next guest with Dave Letterman, which is a completely, you cut out all of the hoops and I could sit and watch that all day. And I do all weekend, whenever something like that comes on and it gives Dave something and it gives, it gives entertainers, unlimited creative freedom, which was not a thing 20 years ago.

Josh: Yeah. You, you think you flash back to 97. I mean, Seinfeld was at its peak and now you've got, you know, Jerry Seinfeld with comedians in cars, getting coffee, just doing what he wants to do

Erick: And, and complete control. And that's what he wanted. He didn't want to come back into the industry and be pigeonholed in the NBC Seinfeld box. He said, I'm just going to go do what I like and people like it, or they won't. And there's an audience for all of that now.

Josh: So big takeaway is blockbuster loss, Netflix one. Yes.

Erick: And you should just kind of take a good idea and run with it and that's, uh, yeah, I think our idea is done. If you want some creative freedom, that's, that's the route to go. Oh, so

Josh: This episode is now done. We took an idea to done, uh, thanks for listening. And we're looking for our audience startups that could use daily advice. Uh, and if you happen to know them, have them subscribe and leave a review for us on iTunes.