Being a Netflix investor (which I am) is not for the faint of heart. Within the space of a few days recently, Netflix stock reached an all-time high, then fell off a cliff after Netflix reported disappointing quarterly earnings, only to rebound in stunning fashion the following day, before dipping the day after. The wildly gyrating stock price certainly makes for dramatic headlines. But the real legacy of the company is not its market capitalization but its ability to change human behavior.
Netflix CEO Reed Hastings is a market maker. Market makers do more than make money. They shape behaviors of people and companies. Netflix is undeniably shaping how people live going back to its founding in 1997. Along with Amazon, Netflix ushered in the era of on-demand living. If Amazon made it possible for people to buy things on their own terms, Netflix did the same for entertainment. Arguably Netflix and Amazon laid the groundwork for Uber’s disruption of the transportation industry through on-demand ride sharing. Together these companies ushered in an economy based on on-demand living.
A Cultural Phenomenon
The idea of giving viewers a digital catalog of movies to stream not only knocked Blockbuster out of business but made Netflix a cultural phenomenon as viewers embraced a new way of experiencing entertainment on demand. In 2009, Twitter users began using the phrase “Netflix and Chill” to describe the increasingly popular practice of simply hanging out with Netflix like a friend. Soon, “Netflix and Chill” became a euphemism for people hooking up to have sex, which is how we commonly think of the phrase today. The phrase “Netflix and Chill” became an internet meme and topic of much analysis and controversy. Netflix was shaping how we communicate as Google has done (“I’ll Google the movie time”). Continue reading