Netflixed: The Epic Battle for America's Eyeballs

by Gina Keating

To improve Netflix’s finances ahead of the IPO, Hastings homed in on the Marquee program as the best bet for a steady revenue stream and eventual profit. He insisted that supporting both subscription and à la carte rental wasted manpower and resources and needlessly confused consumers. He argued strongly for abandoning à la carte rental in a tense meeting in late 1999 or early 2000 with the company’s executive and engineering teams. Several members of both teams had serious doubts about whether the sign-up rate for the subscription service could compensate for the loss of the à la carte business. Kish and Randolph feared the change would anger electronics manufacturers, who were still advertising Netflix coupons on their DVD player boxes. Instead of getting the ten free rentals they had advertised, the manufacturers’ new customers would have to hand over their credit card numbers to receive a free one-month trial subscription. Randolph hoped consumers and manufacturers would not perceive the change as a bait-and-switch tactic.