Season 3, Episode 9: Netflix (Part 2)

Acquired

Ben Gilbert and David Rosenthal

Venturecapital, Ma, Investing, Acquisitions, Startups, Vc, Investment, Business, Technology

4.8 • 2.9K Ratings

🗓️ 25 November 2018

⏱️ 88 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

We complete our two-part Netflix special with the company’s bold transition to streaming, including of course the most (in)famous spin-out in business history. Rising from the ashes of Qwikster, we chronicle Netflix’s rebirth as a media company and long journey back to the top of the FAANG mountaintop!

Sponsors:
Vanta: https://bit.ly/acquiredvanta

Statsig: bit.ly/statsigacquired
Modern Treasury: https://bit.ly/acquiredmoderntreasury

Links:

Netflix’s Qwikster apology video: https://youtu.be/c8Tn8n5CIPk
SNL parody of the apology video: https://bit.ly/2PWEyyZ
Evolution of Netflix home page: https://read.bi/2KvHdte
The Chaos Monkey: https://bit.ly/1qkqDxZ
Benedict Evans’ chart of FAANG stocks: https://bit.ly/2r3D72A

Carve Outs:

Ben: Kevin Rose interviews Matthew Walker on sleep: https://bit.ly/2LpIl5v
David: Justin O’Beirne on Apple’s new Maps: https://bit.ly/2zrQ76Z

Transcript

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0:00.0	Oh my god David look at that podcast room you are in that foam padding. Welcome to Season 3 episode 9 of Acquired, the show about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David
0:24.8	Rosenthal and we are your hosts. Today we are back with the acquired version of
0:30.0	Terminator 2, the second part of our Netflix episode.
0:34.0	You like that, David?
0:36.0	It's just for you.
0:37.0	Oh, man, that's great.
0:39.0	That's great.
0:40.0	Love it. Listeners, now if you remember the last episode we did covered the DVD saga of
0:44.4	Netflix and where we left our heroes in 2009 shortly before the epic launch of
0:49.4	Quickster so today we're gonna dive in on the era of streaming and later original content.
0:55.0	So David, I wanted to have a fun fact to start us off on Netflix.
0:59.0	So as you remember, they were once a plucky startup mailing DVDs to customers and a
1:04.3	you know a remnant of the pre.com bubble starting in 97 and they were doing this you
1:09.3	know even before most people had DVD players they were waiting for the DVD wave to
1:14.4	crest. This company now accounts for 15% of all internet traffic.
1:20.5	I know, that's in my show notes.
1:23.0	Well, sorry to blow your cover early, but you know, streaming movies and TV as a category actually now makes up 58% of downstream internet traffic and no single service
1:36.5	accounts for more of that that bandwidth than that Netflix does and at
1:40.4	peak times it can even account for 40% of the US's concurrent internet traffic.
1:45.2	So you could imagine maybe like 8 PM Eastern or something like that.
1:48.9	Absolutely incredible.
1:51.2	Yeah and this is with some of the best compression and optimization
	...

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