Netflix Wins a Bet from 8 Years Ago

Eight years ago, Jim Griffin and Gordon Bell made a bet on the long-term betting site Long Bets as to whether any profitable video-on-demand service would emerge by 2010, meeting minimum agreed-upon thresholds as to size and scope. When they made their bet, a little company called Netflix had already been mailing customers videos since 1999, although its streaming video service had yet to exist; this October, when announcing third-quarter profits which had grown 35% since 2009, Netflix CEO Reed Hastings observed that in its current incarnation, Netflix is primarily a streaming video company that happens to offer DVDs-by-mail. Netflix expects more than 19 million subscribers by the end of the year, and offers over 100,000 titles by mail.

As you can see in the vote tallies above, many more voters sided with Griffin, who bet on a Netflixian future, than with Bell, who bet against it. It’s still instructive to hear why people thought it would fail, though.

Bell:

You should be able to get something like video-on-demand today, using a relatively unobtrusive caching arrangement, on cable, DSL, or even satellite. The fact that you can’t – after so many years of imagining it, developing the core technologies, and experimenting with business models – leads me to expect that VOD isn’t likely to happen within a decade. Progress has been nil.

I wish I were more optimistic. I watch TV while I exercise, and it annoys the hell out of me. I sit there with my clicker – going between MSNBC, Headline News, NBC, ABC, CBS – and they all show their commercials at the same time! With VOD or even today’s PVRs, I wouldn’t have to put up with that. But I don’t expect to give up my clicker any time soon.

The first mention of Netflix comes in a May 16, 2003 comment:

NetFlix claims to have more than 13,500 titles and more than one million members. You order the movie on the Internet, you just can’t watch it until all of the bits of the movie arrive. They just happen to be delivered to your mailbox and you have to put the bits into your computer or dvd player.

Would that qualify if they hit 5 million subscribers?

Another commenter, writing in June of 2002:

Profitability is the killer definition here. Is the company that eventually offers this service to be profitable? (Sony, Viacom,etc…) or is the specific VOD division to be profitable. I think the latter is a stretch even by 2020.

(Longbets via Hacker News)