The Best Entertainment Era

From the very beginning of the idea of ​​Netflix, Ronan hired an economic research company to watch Netflix. Two years later, he spent hundreds of thousands of dollars on this.

I also gained a lot. Not only did I get a file cabinet full of relevant information, but the two investigators of this company also entered Netflix during the recruitment of Netflix. The company's every move.

After seeing Reed Hastings at the party that time, Ronan also asked Robert Lee to contact him several times. He wanted to invest in Netflix, but was rejected by Reed Hastings. What is needed is not only funds, but also a platform.

Netflix’s initial equity was almost entirely in the hands of the two co-founders, Reed Hastings and Mark Randolph. Just like Relativity Entertainment, as long as the other party is unwilling, there is almost no good way to acquire it.

Ronan also considered starting a new website company. After all, his last job in his previous life was the Internet video business, and his major was a good fit. However, after seeing several reports sent by the investigation company, he thought about it several times and finally gave up on it. idea.

The times are different, and the business is also different. Netflix's entrepreneurship is more than difficult to describe.

Seeing the investigation report that Netflix has spent money to build an online leasing and picking system, straighten out postal channels, build a storage platform, etc. in the past few years, Ronan knew that it was impossible for him to take care of both aspects at the same time when he started his business.

The money that Netflix has burned in the past few years has definitely exceeded the value of the company at this stage.

Ronan is not afraid of difficulties, but lacks of funds and energy. It is almost impossible for him to quickly develop a film production and distribution company, fool people around to invest in movies, and at the same time complete another version of Netflix. completed tasks.

He has always had a relatively clear mind, knowing that his energy and funds are limited, and the stalls in the entrepreneurial stage are too large, and it is very likely that he will end up with hatred in the end.

In contrast, it is more in line with Ronan's reality to complete the start-up at Netflix, build the basic structure, and wait until it wants to further expand the business and faces an extremely difficult situation, before making an investment.

After several years of hard work, Relativity Entertainment has been on the right track, integrating production and distribution, and has accumulated a certain amount of funds through several blockbuster movies.

Now Ronan can not only spare his energy to take care of other aspects, but also holds the most critical funds to achieve his goals.

Since March 2000, the Internet industry has been crying, and Netflix is ​​no exception.

Things haven't been good since then.

Sitting in the office, Ronan flipped through Netflix's investigation reports for more than a year. From the analysis sent by these Netflix insiders, he could clearly see the situation of Netflix.

Netflix's main business, the Internet rental and sales of movie DVDs, has grown extremely slowly in the past year, with losses doubling every year, and Reed Hastings is also constantly adjusting internal management, just like Like most start-up companies, when the entrepreneurial stage is completed, Netflix's entrepreneurial team will inevitably be marginalized.

It was Mark Randolph who really led Netflix to complete its business. His original entrepreneurial team has fallen apart, and most of them have left Netflix.

However, Mark Randolph has a close friendship with Reed Hastings, and his own desire for power is relatively weak. He still stays at Netflix as the president to assist Reed Hastings.

After carefully reviewing these investigation reports again, Ronan clearly realized that the best opportunity to attack Netflix had arrived.

The two Netflix entrepreneurs, especially Reed Hastings, not only had the idea of ​​selling Netflix, but they were still looking for suitable candidates.

In his previous life, Ronan had studied Netflix to some extent because of the industry he was engaged in, and he remembered very clearly that after the Internet bubble burst, Reed Hastings not only wanted to sell Netflix, but Under such circumstances, it even got to the head of the deadly rival Blockbuster.

According to news reports, Reed Hastings founded Netflix with Mark Randolph after the software company he worked for was acquired because of dissatisfaction with Blockbuster's late payment fees.

Ronan collected these materials, leaving only two copies, and read them carefully again.

One is the financing situation of Netflix in the past two years.

It is not that Reed Hastings has not found any funds. As a former executive and shareholder of a software company, he has considerable assets. He also raised a lot of funds in the form of mortgage loans in the early days of his business. This also made Netflix It lasted until the end of 1999.

During this period of time, when Internet stocks became popular, Netflix also had nearly six-figure registered members. After a lot of hard work, Reed Hastings finally attracted the attention of the ideal big company and big fund company. Eye-catching, obtained opportunities for venture capital and large-scale platform promotion.

In early 2000, the French giant Arnault Group, after several rounds of on-site inspections of Netflix and two months of negotiations with Reed Hastings, was ready to invest in Netflix.

This venture capital investment is divided into two rounds, which are 30 million US dollars invested in mid-2000 and 100 million US dollars invested in early 2001.

At the same time, Arnault Group will be responsible for vigorously promoting Netflix.

Big group, big platform, big investment, if this deal can be reached, Netflix will definitely not be in the current situation.

At that time, Ronan had already obtained the relevant report, but he just stared at it closely and did not take much action, because the first investment would not be made until the middle of 2000.

Unsurprisingly, after the Internet stock crash in March, the Arnault Group canceled all investment plans for Netflix.

This is not a situation facing Netflix alone.

The dot-com bust was Silicon Valley's version of a sandstorm, as young software engineers were paid worthless stock options to haunt abandoned office parks, looking for work in vain, and many had to go back to school , seeking to become a lawyer or accountant.

Reed Hastings is having a hard time making the case that Netflix still has a bright future in the midst of dot-com crashes.

After more than a year of persistence, there was a corresponding second report.

This is something that just happened last week.

Reed Hastings flew to Texas to meet Blockbuster CEO Ed Stead in Dallas.

According to Ronan's judgment from the investigators, this should be the memory of Reed Hastings' plan to sell Netflix to Blockbuster.

In my memory, the two sides did not reach a deal. Even if an agreement was reached, Ronan would have time to make a move. Reed Hastings is a businessman after all.

The report obtained also proved Ronan's guess.

Reed Hastings did not attract any attention from Blockbuster. After Ed Stead met with him, he threw it to his agent John Antioch.

This has actually shown Blockbuster's attitude.

But Reed Hastings did not give up, and explained his proposal to Blockbuster staff headed by John Antioch: Blockbuster acquired Netflix and turned Netflix into Blockbuster's right-hand man on the Internet.

In his view, this is a win-win result. It can save Blockbuster from the huge expense of converting its vast video tape inventory into DVD, and let Blockbuster open up the situation on the Internet, and Netflix can effectively use the accumulation of Blockstone stores. More than 20 million active users.

Netflix, which has become a subsidiary of Blockbuster, will focus its main business on old movies and niche movies, and leave the new movie business, which accounts for 80% of the business volume, to Blockbuster.

Meanwhile, Netflix could put promotional materials and registration computers in every Blockbuster chain.

Reed Hastings devised a strategy that looked pretty good in order to sell Netflix.

Moreover, his asking price is not high, 50 million US dollars.

This figure is far less than the money that Netflix has burned in the past few years.

If you look at this deal from the perspective of the future, it is simply too cost-effective. Blockbuster will not only get the opportunity to enter the Internet, but also use it to achieve transformation.

But in the current environment, some things look completely different.

Blockbuster, led by John Antioch, had no interest in Netflix at all, expressed serious doubts about the viability of Internet companies, and said the market had overvalued untested business models.

It wasn't just Blockbuster's opinion, Ronan got reports that Netflix's entourage wasn't surprised at all when John Antioch laughed at Reed Hastings' proposal.

Even Netflix executives don't believe that Blockbuster will buy Netflix at a high price of $50 million.

In the Netflix meeting that followed, Reed-Hastings vowed that Blockbuster had made a mistake that they would soon regret.

Ronan believes that this is very likely to become a reality, but Reed Hastings is actually bluffing, because Reed Hastings has not given up on selling Netflix after the meeting with Blockbuster executives in Dallas. idea.

Judging from the exact analysis of the investigators, Reed-Hastings is currently hesitant,

On the one hand, companies that don’t want to let go of starting a business are looking for ways to push Netflix on the right track.

On the other hand, Netflix lacks the funds for sustainable development, and Reed Hastings is in debt, and he also wants to sell Netflix to get rid of his own difficulties.

Like Ronan running Relativity Entertainment, it is not easy for any startup company to grow.

Today's Netflix has a complete platform structure, and the funds burned to complete these structures far exceed the actual value of the company at this stage.

From this point of view, it would be very cost-effective for Ronan to buy it.

In the past few days, Ronan convened high-level executives of Relativity Entertainment, especially Mary, Robert Lee, George Clint, and Garcia Rodriguez, to discuss the feasibility of acquiring Relativity Entertainment and Netflix.

But to Ronan's surprise, before Relativity Entertainment could contact Netflix, Reed Hastings approached Embassy Pictures.

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