Chapter 193 Netflix’s Challenge

America today is no longer like it was in the first half of the last century, when it still had such a strong filter of worship for the British aristocracy.

At that time, the "country bumpkins" in North America really imitated the lives of British aristocrats just like fans follow idols.

Newspapers also never tire of reporting in great detail on the gossip and details of gatherings of British aristocrats.

There is even a special "support group" that pays attention to the Queen's daily clothing, diet and even her pets, and enjoys imitating them.

Today, as the economy and culture of Britain and even the whole of Europe have been surpassed by America, the so-called "British aristocracy" is no longer so popular in America, and the existence of them is just icing on the cake.

The only exception is the British royal family. Perhaps it can be said that "distance creates beauty". America's attention and enthusiasm for the British royal family still exists.

The wedding of the Prince of Wales and Princess Diana was broadcast most crazily in North America, becoming one of the most watched television programs in the United States in the 1980s. At that time, the union of the two satisfied many people's fantasies about the prince and princess in fairy tales.

Just like Barron at this moment, the enthusiasm he felt, in addition to his status as a duke, was more due to the wealth and influence he possessed at the moment.

At this time, Nicole Kidman had divorced Tom Cruise two years ago and focused on her career.

"I was a producer before. It was a horror movie. It should be released in two months..."

It can be seen that Nicole Kidman is still very enthusiastic about the young and handsome British Duke. At the beginning, the two of them talked about some interesting things in Hollywood in a corner of the hall. However, both Barron and Nicole were too conspicuous, and people came over to greet them from time to time.

So later, at Nicole's invitation, Barron went up to the second-floor balcony with her and had a good chat where they would not be disturbed.

It must be said that Nicole's eloquence was very good, which made Barron feel very happy and satisfied. In the end, he also poured out his passion for Nicole...

…

It has been nearly a year since DS Capital last invested in Netflix.

As of now, Netflix's stock price has risen to over $25 per share.

The current stock price has risen by more than 400% compared to last October when Netflix's stock price was about to fall below $5.

Even when DS Capital invested in Netflix and acquired its additional shares at a price of US$10 per share, Netflix's current stock price has risen by more than 150%!

The main reason for this is that Netflix's subscribers currently exceed 1 million, and they have successfully started to make profits after the Internet bubble.

Although Netflix is ​​currently called an Internet company, in fact they have not yet involved in the streaming media service that will directly cause their market value to soar. They are just a company that rents discs. The difference between them and the current giant in the video rental business, Blockbuster, is that they have just put this business online.

However, Hastings has not been so relaxed recently, because their biggest competitor has also begun to get involved in online rental business.

Blockbuster entered the video rental industry in 1985 with extraordinary moves. It entered the market as a large chain store right from the start - it spent $6 million to build warehouses and expanded rapidly with richer film resources.

In 1989, a new Blockbuster store opened every 17 hours, in high-traffic locations.

At its peak, Blockbuster claimed that "70% of Americans can find a Blockbuster store within a 10-minute drive."

However, what many users criticized was that Blockbuster would charge "late fees" to customers who did not return the DVDs on time.

This income alone accounts for more than 10% of Blockbuster's total revenue. At the most, Blockbuster collected $800 million in late fees, accounting for 16% of its total revenue.

More and more customers were unhappy with late fees, which became the entry point for Netflix's establishment in 1997.

Later in an interview, Netflix founder Hastings claimed that he started his business out of anger because he forgot to return a movie and was forced to pay $40 by Blockbuster.

As to whether this is true or not, it is difficult to verify.

Netflix's model is to put the rental business online, and there is no overdue fee - order the disc online and send it by mail offline.

In 2000, Netflix lost $57.4 million and could no longer sustain itself...

At that time, Hastings found Blockbuster and suggested that Blockbuster acquire them for $50 million, and Netflix could help Blockbuster manage its online business.

In response, Blockbuster directly rejected the offer. They looked down on Netflix and felt that they could easily develop a similar business with their own resources.

This is a bit like when Xiao Ma wanted to sell OICQ to Zhalang for $1.5 million, but was rejected by Zhalang because the technicians of Zhalang thought that OICQ was too simple and they could make it in a month, so it was not worth that much money...

However, Blockbuster did have the confidence at the time. As long as they were willing, even if Netflix had the first-mover advantage, it would undoubtedly lose.

Just at the beginning of this year, Netflix announced that it had reached one million subscribers, which also attracted the attention of Blockbuster CEO John Antioco, who began to pay attention to online rentals.

Next, Blockbuster spent $1 million to acquire a small online DVD rental company, and Antioco gave a man under his command named Evangelis some money to let him run it independently.

This Evangelis took half a year to copy Netflix.

So now Netflix faces direct competition from Blockbuster's online business.

When Hastings was chatting with Barron, he also talked about this matter. It can be said that he was still facing a formidable enemy at this time.

However, Barron did not care too much about this, because he knew that although Blockbuster's online business once put a lot of pressure on Netflix, they were destined to fail.

The main reason is that it seems that the biggest enemy of Blockbuster's online business is Netflix, but in fact their biggest enemy is Blockbuster itself, or their overly powerful offline store business.

Many of Blockbuster's offline stores are franchise stores. For their own benefit, the store managers will resist the company's promotion of online business - if everyone rents DVDs online, the store's income will naturally be greatly affected...

This is just like Kodak, which first invented the digital camera, but put it on hold for the sake of its own film industry, and was eventually replaced by digital cameras.

So Baron expressed his support for Hastings implicitly and implicitly, and said that DS Capital was willing to continue investing in Netflix if necessary.

This action of his once again won Hastings' favor...

But Netflix is ​​not short of funds now. After all, they have already achieved profitability and have not yet engaged in the streaming media business that requires burning money.

However, when it comes to the streaming media business, Barron naturally knows that it will be a track with great potential in the future.

Just like the future, many giants such as Netflix, Amazon, Disney and YouTube will gather here.

But it is too early to consider this now. After all, the broadband speed at this moment has not yet reached the conditions for its explosion.

Even DailyVideo.com, jointly launched by O2 Telecom and SEM Group, limits the size of videos uploaded by users due to broadband transmission speeds.

Otherwise, why did the original YouTube not appear until 2005, and why did Netflix's streaming business only start to develop after that?