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Eunice Beady
Neil: Yeah. After the Schlumberger Lab had dissolved, people were spun out to all kinds of different companies, and I went to join [inaudible] Research Lab. And I was working on productizing some of my research, making a software tool, and Reed contacted me. He had built a prototype of a software checking and validation tool he thought might be useful. And he brought it over and I tried it out, and it was useful. It found a bunch of issues and challenges. And shortly afterwards, he invited me to join his new company and productize that offering. And then that was Pure Software and the tool was Purify, which was a C and C++ error checking tool.
Neil: It clearly had some big ambitions, but at the time, the goal was to start building a business around shipping DVDs through the mail. And DVDs, you remember, were only just introduced, so there was a very small install base of DVD players in the country and the world. And shipping by email was an unusual proposition, to be sure, so it was quite a speculative venture.
Brian: Well, right. I think we need to underline that. Everyone thinks of Netflix as this subscription service, but it was an a la carte rental service at the beginning. Do you remember what the thinking was that evolved into the subscription plan that people would remember?
Neil: Well, even before I joined, we were discussing how we could turn this into a recurring revenue model, which is what subscription is, effectively. And it became quickly apparent that we needed to get to that really quickly. We were able to get customers to come try Netflix, but to get them to come back again was difficult. And so, the key pieces that we needed to build were a model where people pay for a month of service and then they get to use it a number of times during that month. And secondly, the Queue was a super important piece of the puzzle because if you got consumers to build a list of the titles they were interested in, then you could automatically ship the next one when they returned the first one. And that was the key to providing a continuity of service and a value that made people engage.
Brian: Wait a minute, why do I have a memory of that? Like, did I actually watch that DVD? You literally just rang a bell in my head. I feel like that happened to me. Anyway, sorry, go ahead.
And so, I think the learning that we took away from that was it was more important to focus on our customers and being great at making a great business than worrying about what the competitors are up to. And, you know, eventually, as history shows, Blockbuster overextended themselves and went bankrupt. And you know, I think, in that case, it was responding a little too late and then not really being able to put enough effort and focus on it to catch up with the lead and the advantage that we had.
Neil: Actually, I would say it was concurrent, but no, we had started working on internet delivery actually a couple of years before, three years I think, before YouTube came on the scene, and it was a bit stop and start. And at the time, internet speeds were far too low and video compression was far too poor for a real-time delivery. And so we were looking at something much closer to the DVD model of trickle it down overnight and then have it stored on a disc on a box.
And the content protection scheme was based on actually having a full-out Java implementation that was able to execute Java code on the Blu-ray disc. And, in fact, it was that BD-Java that was the authoring environment for all of the menuing and setup and control for Blu-ray discs. And we actually, in an amazing effort, we were able to build a complete streaming player using the BD-Java and delivering it on a disc to Sony PlayStation. And so, for the second year, we actually had PlayStation streaming, but not from a [inaudible], but from a piece of code delivered on a plastic disc, which is an interesting irony.
Brian: You know what, it occurs to me we do need to back up for a second. When you first launched streaming, what is the uptake, like, that you noticed? Like, how quickly do you see existing Netflix users using streaming?
And, yeah, lots of interesting stories along the way. The key one is that we recognized immediately that to do a fork of our legacy system into AWS was not gonna get us what we wanted, we needed to re-architect with the structure of AWS in mind. And we needed to switch to things like NoSQL databases, instead of trying to use bigger and bigger Oracle installations. And we needed to switch to a micro services architecture, instead of a sort of monolithic client server architecture attached to the Oracle database.
Brian: That was actually gonna be one of my questions because here you guys are originally trying to build for set top devices, for TVs, and things like that. So did the whole mobile viewing and, you know, the app economy, did that all kind of take you by surprise a bit?
Brian: Yeah, well, good luck if you do one or maybe all three of those things. But Neil Hunt, thank you so much for coming on the show, giving us just a wonderful background history of Netflix, of the streaming product. But also, thank you for sharing a really, really fascinating career.
Netflix recently released a new documentary series called History 101. Each episode provides viewers a brief history lesson on a variety of hot-button topics, including nuclear power. While providing an entertaining take on a crucial industry, there were a few inaccuracies that we feel needs to be addressed.
Overall, the series attempts to summarize the facts about nuclear energy and the important role it can play in helping us meet our domestic energy demand and provide clean and reliable power around the world.
Furthermore, commercial nuclear power plants and their operators are completely transparent with international safeguard and security inspections. When other countries use U.S. technology, they form long-standing relationships with the United States and emulate our high standards for safety and security. Therefore, it is crucial that the United States continue to lead the world in nuclear technology and export our expertise to other countries. Simply having commercial nuclear power does not mean that a country has the capability or ability to develop nuclear weapons.
While the episode correctly states that Russia became the first country to connect its nuclear power plant to the grid, the United States was actually the first to generate electricity from a nuclear reactor.
Low levels of radiation are around us every day. Some come from natural sources like the sun and rocks. That means that a person living in higher altitudes is exposed to more radiation than a person living at sea-level. In fact, you get more radiation from your granite countertops than by living next to a nuclear power plant.
The nuclear industry is heavily regulated to ensure that nuclear workers and the public are always protected from any hazard. Simply put, exposure to small doses of radiation is not likely to cause cancer.
Finally, the episode states that France is the biggest user of nuclear energy. While France does have the highest percentage share of nuclear power on its grid compared to other countries, the United States generates and uses more nuclear power than the next two leading countries combined.
References in this story to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring by the Department of the Energy.
Netflix is an American subscription video on-demand over-the-top streaming service. The service primarily distributes original and acquired films and television shows from various genres, and it is available internationally in multiple languages.[6]
Launched on January 16, 2007, nearly a decade after Netflix, Inc. began its pioneering DVD-by-mail movie rental service, Netflix is the most-subscribed video on demand streaming media services, with over 277.7 million paid memberships in more than 190 countries as of July 2024.[5][7] By 2022, "Netflix Original" productions accounted for half of its library in the United States and the namesake company had ventured into other categories, such as video game publishing of mobile games through its flagship service. As of October 2023, Netflix is the 23rd most-visited website in the world, with 23.66% of its traffic coming from the United States, followed by the United Kingdom at 5.84% and Brazil at 5.64%.[8][9]
Initially, Netflix offered a per-rental model for each DVD but introduced a monthly subscription concept in September 1999.[20] The per-rental model was dropped by early 2000, allowing the company to focus on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per-title rental fees.[21] In September 2000, during the dot-com bubble, while Netflix was suffering losses, Hastings and Randolph offered to sell the company to Blockbuster for $50 million. John Antioco, CEO of Blockbuster, thought the offer was a joke and declined, saying, "The dot-com hysteria is completely overblown."[22][23] While Netflix experienced fast growth in early 2001, the continued effects of the dot-com bubble collapse and the September 11 attacks caused the company to hold off plans for its initial public offering (IPO) and to lay off one-third of its 120 employees.[24]
DVD players were a popular gift for holiday sales in late 2001, and demand for DVD subscription services were "growing like crazy", according to chief talent officer Patty McCord.[25] The company went public on May 23, 2002, selling 5.5 million shares of common stock at US$15.00 per share.[26] In 2003, Netflix was issued a patent by the U.S. Patent & Trademark Office to cover its subscription rental service and several extensions.[27] Netflix posted its first profit in 2003, earning $6.5 million on revenues of $272 million; by 2004, profit had increased to $49 million on over $500 million in revenues.[28] In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.[29]
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