Chapter 311： Focus on stability

Due to the completion of the equity change, Ronan needs to rush to San Francisco as soon as possible to investigate Netflix on the spot. It is impossible to leave Mark Randolph too much time. If Mark Randolph delays in making a decision, he can only start a backup plan.

Of course, that will add a lot of trouble.

Perhaps too much effort and enthusiasm was poured into Netflix. Only three days later, Mark Randolph gave Ronan a definite reply, saying that he would continue to stay at Netflix as the CEO.

In this way, Ronan saves a lot of trouble and can also ensure a smooth transition of Netflix after the change of equity.

Later, Ronan, accompanied by Mark Randolph, came to the Netflix headquarters in St Andrews, San Francisco.

This is an office park next to Highway 17 in the Scotts Valley. It was converted from the office space of a branch of a bankrupt bank. The area is not very large and the decoration is relatively old.

The office also seems to reflect Netflix's current funding difficulties.

As soon as he entered the office area, the green carpet was shining, and Mark Randolph said to Ronan half-jokingly: "This is the color of the dollar bill that everyone desires."

Ronan nodded, but his eyes were attracted by the thick metal armored door on the wall opposite the office area.

Mark Randolph introduced: "It used to be the bank's vault. Later, along with the office area next door, I transformed it into a Netflix warehouse."

Ronan said, "Let's go and take a look."

In the eyes of countless people at Netflix, Ronan walked through a long and narrow office area, where dozens of rows of folding desks and cheap office chairs were placed on top of the top-of-the-era computers. On the computer monitor, expensive Oracle software is running.

Passing through the office area, Ronan followed Mark Randolph into the warehouse.

Except for the small office at the entrance, the huge warehouse was filled with shelves, all with DVDs.

Mark Randolph introduced the person in charge of the warehouse area to Ronan, Ronan also chatted with him a few words, and then asked Connie next to him to record the relevant personal information.

After visiting the warehouse, Ronan returned to the office area, and Mark Randolph quickly called a meeting with all the company personnel.

Facing all the employees of Netflix, Ronan didn't speak much, mainly used to stabilize the personnel for a smooth transition.

Shareholding changes will always have various effects on the company, and personnel must be stabilized.

As long as Netflix does not resign on a large scale, it will not cause much problem.

When all Netflix personnel gathered in the office area, Ronan and Mark Randolph came to a high platform in front of the warehouse.

"Introduce myself, I'm Ronan Anderson." Ronan said loudly: "The owner of the Hollywood Relativity Entertainment Group, a film producer."

His voice is loud enough: "Just last week, Relativity Entertainment completed its wholly-owned acquisition of Netflix. Many people may have heard some rumors. I hereby declare that Netflix’s corporate structure and business policies will not change in any way. For this reason, I specially invited Mr. Mark Randolph back to serve as the CEO of Netflix after the equity change."

Mark Randolph smiled and said, "Everyone, we are all old friends. I don't need to introduce myself, right?"

As soon as this was said, there was a lot of laughter from below, and a lot of the guard and doubt in the eyes of many employees disappeared.

Having Mark Randolph as the CEO, in addition to ensuring the continuity of Netflix, it can also effectively calm people's hearts.

This is one of the reasons why Ronan specially sent the invitation personally.

Ronan added at this time: "Netflix's plan and purpose will not change. Establish a website that has an attractive and convenient user interface and a smooth running backend, as well as fast and complete delivery of DVDs to customers. ."

After this sentence, there was not much warm applause.

Many Netflix employees are relieved that they are not afraid of the change of company equity. Strictly speaking, working for the former boss and the current boss is essentially the same. What is afraid is that the new boss will start to toss after taking over, which will cause unstable jobs.

This job has a good income. If you change jobs rashly, your mortgage, car loan, and credit card will collapse if there is an accident.

Ronan continued to stabilize people's hearts: "Starting from January 1, 2002, Relativity Entertainment will inject 100 million US dollars into Netflix for a period of one year to improve the office environment and employee benefits, as well as to promote the company's business. development of!"

After stabilizing the company's personnel, Ronan immediately called Netflix's management to a meeting.

Coming from Los Angeles this time, in addition to the company of Mark Randolph and the assistance of Connie, Mary and Garcia also came to St. Andrew with Ronan.

The management meeting is still focused on stability. In a short period of time, Ronan will not let Netflix make many changes. Netflix’s existing business and operating direction are not problematic. What really caused Netflix’s current dilemma is that on the one hand, The environment dictates that, on the other hand, Netflix lacks the necessary funds for development.

Netflix’s supreme power structure must be rebuilt. Mark Randolph will be promoted from chief operating officer to chief executive officer and will continue to be responsible for Netflix’s daily operations. Ronan personally serves as Netflix’s chairman, Mary and her team are temporarily in charge. For Netflix's financial affairs, Relativity Entertainment will send someone to serve as Netflix's chief financial officer.

At the same time, Ronan and Connie’s assistant team will stay in St. Andrew for a while to learn more about Netflix at this stage.

After a comprehensive inventory of Netflix's internal situation and various aspects of its business, Ronan can be considered to have a sufficient grasp of the company's situation, and Netflix is ​​actually still in the initial stage of development.

The most important one is undoubtedly Netflix's online leasing business.

Netflix’s rental business requires that the sale and rental of DVDs are based on the principle of optionality. The current rental fee model comes from an improved version of the video tape rental store-a rental fee of US$4 plus a single disk transportation fee of US$2, each Adding a CD will add an additional $3.

The renter can keep the film for seven days and return it by postage paid mail.

If customers like a certain movie, they can buy it directly at a 30% discount on the retail price.

In addition, since 2001, Netflix has also introduced a monthly subscription fee model for registered users.

This is also the mainstream business model of Netflix's later online leasing, but it is still in the promotion stage.

With the rapid development of the Internet in North America, Netflix's main business is indeed promising as long as the cost is controlled. The previous problem of funding has led to too few authorized film and television dramas.

In 1999, Netflix had only 500 DVD movies in stock, and most of them were old movies.

So far, this number has only risen to 1,200.

This is not as large as the six major Hollywood film libraries, and it also contains a lot of documentaries and overseas movies.

The film source is one of the key factors that severely restrict the further development of Netflix.

In addition, the impact of the general environment cannot be ignored.

In the first two years, DVD players were still too expensive and there were too few DVD movies to fully attract mainstream consumers.

There are also technical problems. Because the format has not established a unified standard, it is difficult for even large press factories to provide standardized copies, so that all DVDs can be played on the same player.

But the good news is that compared to the video tapes of the year, the development of the DVD industry can be described by the speed of light.

The popularity of DVD players far exceeds the speed of video recorders-in March 1997, optical mode DVD players were officially launched in North America, and 400,000 units were sold in six months.

In comparison, it took more than 3 years for the video recorder to enter 200,000 households.

At the same time, the price of DVD players dropped rapidly. At the beginning of 1999, the average selling price was still US$1,000, and now it is less than US$300.

The popularization of DVD provides necessary conditions for Netflix's development.

Perhaps others are still in the hazy stage, but Ronan is very clear that starting next year, DVD will completely go out of the stage of commercial paradox-consumers are unwilling to buy DVD players because stores do not generally provide DVDs; retailers are unwilling to stock Sell ​​DVDs because consumers don’t have DVD players.

Ronan had already thought of a strategy to promote Netflix, and discussed it with Mark Randolph for the first time-through the DVD manufacturer placing Netflix coupons in the player box, promising consumers to guarantee them Have the opportunity to try a library of more than 1,000 movies.

This strategy quickly passed the approval of Netflix's management. After the first funding of Relativity Entertainment was in place, Netflix quickly formulated relevant plans and prepared to promote implementation.

Ronan also plans to use the media network of Relativity Entertainment to start a large-scale commercial promotion for Netflix in the media starting in December.

In addition, various advertisements of Netflix will appear on the film produced by Shahai Entertainment.

These can effectively promote Netflix and bring more customers to Netflix.

Compared with Netflix, Relativity Entertainment is already a very large platform.

When Ronan was about to leave San Francisco , one thing was discovered. Connie found an unmailed letter while sorting out the office where Reed Hastings left.

In this letter written by Reed Hastings to Mitters, there is his actual view of Netflix during this period: I have devoted many years to Netflix’s survival, and we found it to be a mess. Shit——Unfortunately similar to what the finished entrepreneurs in this valley did...

From the line between the lines, Ronan could also see that Hastings really thought that Netflix had come to an end.

In their previous lives, Hastings and Netflix survived this most difficult stage and ushered in a turning point in 2002.

But the emergence of relativity entertainment has changed everything.

Ronan returned to Los Angeles after staying in San Francisco for more than a week. Netflix temporarily focused on stability. Except for publicity, other actions would have to wait until the company's smooth transition.

Back in Los Angeles, Ronan re-invested in the preparation of the film, and dedicated time to participate in the North American premiere of "The Lord of the Rings: Squad of the Ring".