21
Sep

This Means War—Privations of a Price War

Leave a Comment  /  Posted in Blog Post, Christina Kish, Marc Randolph, Netflix History, Reed Hastings, Te Smith

There was one very consistent element to every interview I did for Netflixed: every member of the Blockbuster and Netflix teams expressed the sentiment that the paradigm-shattering fight between the two companies had been the highlight of their professional careers. The urgency and absorption with which they had approached the five-year-long battle had unleashed their creativity and had shown them what they were capable of as executives and as combatants.

Christina's Poster

The copy on this poster is pretty funny when you apply it to Blockbuster: “… a savage empire … lost a thousand years in time!” Photo Credit: Christina Kish.

It was clearly exhilarating and my interviewees described a sort of wartime camaraderie that developed at each company. Christina Kish, head of marketing for Netflix, was legendary for keeping insane hours at the Scotts Valley headquarters in the company’s startup days. Her husband Kirby, who worked as a consultant for Netflix, described how she would often crawl under her desk and sleep if it got too late to drive back over the hill to their home in Silicon Valley. In recognition for her mighty competitive spirit, Marc Randolph found this poster and hung it on the door of the office Kish shared with Netflix’s PR chief, Te Smith.

In addition to their all-consuming schedules, both teams endured quite a bit of privation, as this next photo of Lillian Hessel, vice president of customer marketing for Blockbuster Online, illustrates. Hessel came to Blockbuster Online from a posh corporate job at AT&T where she had enjoyed expense account lunches and first-class business travel, assistants to handle the scut work, and a large corner office. She traded it for regular lunches at this extremely greasy hamburger joint down the street from the Paramount Building, where she shared a tiny office that smelled like the sandwich shop downstairs with several co-workers. She told me it was the most exciting work she had ever done.

Lillian at Burger Joint

I snapped this shot on a day when Lillian graciously agreed to show me the environs of the Paramount Building, the funky neighborhood where Blockbuster Online lived for a couple of years before relocating to the corporate headquarters in Renaissance Tower in the posh end of downtown Dallas. Photo Credit: Gina Keating.

As Netflix and Blockbuster Online settled in for the long years of the price war, you might say their executives became a bit obsessed with each other—as this photo of Blockbuster Online’s Ben Cooper and JW Craft shows. I mean, who but the truly obsessed brings a Blockbuster Online mailer to an African safari?

Ben and JW in Africa

Photo Credit: Ben Cooper.

In a stateside version of this photo, Cooper engages in a little “business intelligence gathering” outside Netflix’s old University Drive headquarters.

Ben at Netflix

Photo Credit: Ben Cooper.

Over at Netflix, CEO Reed Hastings drew on pop culture and the classics to rally his troops for the battle against the much larger, better-funded Blockbuster. The press and market sentiment against Netflix was pretty negative as soon as Blockbuster Online launched, so keeping the company focused was a constant challenge.

In this photo, Hastings dons a bathrobe and boxing gloves in a patio outside Netflix headquarters to deliver a rousing speech that invoked Muhammad Ali and his signature line about butterflies and bees.

Reed Hastings with Boxing Gloves

Photo Credit: Chris Darner.

Among the costumes and props Hastings used to prod his team forward against a formidable foe were harpoons (with Blockbuster as Moby Dick) and this fabulous tuxedo sprinkled with cut-up Blockbuster cards. In public, he learned to be very circumspect about his rival but in the privacy of Netflix events he was a keen competitor.

Reed Hastings with Blockbuster Card Suit