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Corporate raider Carl Icahn and CEO John Antioco did not see eye-to-eye for
Blockbuster's future. What is a corporate raider? What is the role of the board of
directors? Explain why this disagreement was ultimately good for Netflix. (Chapter 10)
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Netflix's Reed Hastings and Blockbuster's John Antioco both overestimated their
strategic position against each other. Describe the rational decision-making model. How
do biases impact this model? What do you think were the biases that impacted Hastings
and Antioco? (Chapter 10)
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Blockbuster was the established company and Netflix was the new startup. Describe their
respective strategies and sources of competitive advantage. (Chapter 5)
Reed Hasting was a programmer for Netflix
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John Antioco knew Netflix was not doing well before the meeting at park city
Blockbuster turns on their online model while Netflix is struggling.
Hasting was not impressed with Blockbuster website at all and said he can program it better
o Hasting believes his edge over blockbuster website is Netflix website tracking of
customers every click and move such as preferences (LOADS OF INFORMATION)
Hasting knew that Blockbuster was going broke because of their “Total Access”
Netflix couldn’t match what Blockbuster was doing at the time with Quick Returnals of DVD to
stores when Netflix only had mail ones.
Blockbuster was losing money at every transcation (billion dollars in debt)
o Carl Icahn is the corporate raider
Hasting knew that to survive, Blockbuster would have to buy Netflix
Netflix losing subscribers every quarterly and borrowing money will force them to sell the
business.
Reed Hastings viewed Blockbuster and John Antioco as “illogical”
2 years of hell for John Antioco because of Total Access
o Waited 7 years for Viacom to split off Blockbuster as a public company since 2004 so he
can run it the way it wanted
o He knew that video stores are dying, reduce late fees, and move toward digital delivery.
o Viacom had a special 5 dividend and suck a good chunk of money away from Blockbuster
2004 1.2billion debt because of Viacom
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2005, 80% of video stores were gone, Carl Icahn was mainly trying to get a squeeze of money out
of Hollywood Video and Blockbuster
John Antioco couldn’t buy Hollywood because blockbuster was too much in debt and didn’t have
the money, Carl Icahn had invest both Hollywood and Blockbuster…and now was stuck with
Blockbuster so that made Icahn upset
Carl Icahn threaten John Antioco for a stockholder votes on decisions and John Antioco wasn’t
having that shit
o John Antioco had public letters toward Carl Icahn saying he was a greedy man and had
no plan to pay off the Blockbuster debt
May 2005, Shareholders got rid of John Antioco and made Carl Icahn and other board of
directors
o John Antioco had a 54 million dollars in his contract if he was let go
o Carl Icahn made every opportunity to psychological hurt John Antioco when he could at
his new position
Reed Hasting notice the fighting between the two and it gave Netflix a fighting chance
o Marking of Blockbuster wasn’t as huge as Netflix
2million 2004 to 6million to 2006 (NETFLIX)
1million stalled for BlockBuster
Both businesses bought ads, cut their prices, to try set themselves apart from one another
6 weeks of launch TotalAccess, it double block Blockbuster subs count
Hasting wants to buy blockbuster subscripers