ON GOING PUBLIC
IN retrospect, Mr. Hastings wishes he had waited longer to go public. By the time the investment bankers were willing to sell shares in Netflix, the company was no longer desperate for the $94 million it ended up raising in its initial public offering.
"In hindsight, what triggered Amazon and Blockbuster to compete with us is they could see how profitable we were and how fast we were growing," Mr. Hastings said. It has also meant that Mr. Hastings is constantly fending off analysts and commentators who are convinced that long-term survival requires that he sell the company to a large suitor to ward off the competition.
Netflix has $175 million in cash and is carrying no debt, Mr. Hastings noted, and it has "no desire or need to be acquired."
ON VIDEO ON DEMAND
Mr. Hastings anticipates that it will be 2010, if not 2015, before a lot of the movie-watching public is downloading films over the Internet. Mr. Hastings is convinced that the same features that draw people to his DVD rental service will induce them to use his service to download digitally delivered movies. Netflix has devoted millions of dollars to building an easily navigated Web site while it refines a complex software system that recommends movies based on customer ratings.
"If we differentiate the Web site well enough, with rating histories and other features consumers want, that's our strategic leverage" once people start receiving movies via the Internet, Mr. Hastings said.