From a rejected startup laughed at by many to a $426 billion giant now buying Warner Bros — the Netflix story you didn’t know

Netflix Warner Bros Discovery merger: Netflix’s rise to a $426 billion powerhouse, now preparing to acquire Warner Bros Discovery in a $74 billion mega-merger, may make it seem like the streaming giant is unstoppable today, but the company’s early years were nothing short of chaotic, uncertain, and filled with near-disasters that could have erased it from history.

How Netflix Started as a Small DVD-by-Mail Service in the Late 1990s

Back in the late 1990s, Netflix wasn’t a company that had such a reputation. It was a tiny DVD-by-mail startup trying to survive, run by founders who were just hoping someone would believe in the idea.

Jeff Bezos’ Early Buyout Offer That Netflix Turned Down

In 1998, only months after launching, Jeff Bezos flew the founders to Seattle and offered a buyout “in the low eight figures,” as per an X post by entrepreneur Mario Nawfal. TBPN posted a video on X that says that, "Netflix rejected a $12M offer from Bezos in 1999."

For many struggling startups, that kind of offer would have been a lifeline. But Netflix co-founder Reed Hastings said no, even though the company had barely found its footing.


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The 1999 Cash Crisis That Nearly Shut Down Netflix: Bernard Arnault’s $30 Million Lifeline Saved Netflix

A year later, Netflix almost collapsed anyway. Money was running out fast, and the future looked bleak. The turning point came when Bernard Arnault invested $30 million in July 1999, becoming Netflix’s largest investor and effectively keeping the lights on, as per Mario Nawfal's X post. Without that check, the company might never have made it to the 2000s.

Why Blockbuster Rejected Netflix’s $50 Million Sale Pitch in 2000

During the dot-com crash in 2000, Hastings and Marc Randolph flew to Dallas, hoping Blockbuster would buy Netflix for $50 million. Instead of a deal, they were met with disbelief. Randolph said in an X post in 2023 that, Blockbuster executives “laughed us out of the room," adding that now, “the company that once had 9,000 stores, is down to a single one.”

Blockbuster CEO John Antioco, dismissed the idea entirely as he deemed Netflix a niche business and said “the dot-com hysteria is completely overblown,” as per a 2019 book Randolph wrote about Netflix’s beginnings.

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Netflix’s Rise From Struggling Startup to a $426 Billion Giant

Randolph said in an X post in 2023 that, “I think the more important lesson—a lesson that Blockbuster learned too late—is simply this: ‘If you are unwilling to disrupt yourself, always be someone willing to disrupt your business for you,'" as quoted by Fortune.

He also told Fortune previously that, “I’m proudest of the fact that I didn’t listen when everyone—and I mean everyone—told me ‘That Will Never Work,’” as quoted in the report.

FAQs

Who saved Netflix financially in 1999?
Bernard Arnault invested $30 million and became the largest investor.

Did Netflix really try to sell itself to Blockbuster?
Yes, for $50 million during the dot-com crash.