That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

by Marc Randolph

The Home Rental Library. When we sent out an informal e-mail survey about the possibility of eliminating late fees, we’d gotten a warm response, so we’d designed a format that allowed users to rent four DVDs at a time, for $15.99 a month, and keep them as long as they wanted. As soon as they had returned one of the DVDs, they could come back to the site and rent another. Serialized Delivery. We suspected that we might have problems with the “come back to the site and rent another” part. People were busy. Once a watched DVD was in the mailbox, it would be out of sight, out of mind. So maybe, we could have each customer create a list of DVDs they wanted. That way, when they returned a DVD to us, we could automatically (Te used the term “auto-magically”) send them the next movie on their list. I suggested we call our list the “Queue.” I knew that queue meant line, but I also loved the idea that I could call the help section for this feature “Queue Tips.” Subscription. Having people hold on to our discs for as long as they wanted seemed good for customers—but we weren’t sure what the business model should be. Do you pay a rental fee each time you swap? What if you never send one back? We decided that we should test a monthly fee—that we charged you every month you used the service.