Just The Ticket

There's another, lower-tech industry that may foreshadow the challenges Netflix faces: automobiles. For years pundits have prophesied the replacement of the gasoline engine by pollution-free fuel-cell-powered cars. Those predictions inspired automakers to spend billions in R&D to prepare for this new world, which seems to be coming much more slowly than experts expected. Similarly, Netflix is preparing for the future, even though it believes the era of online movies is more distant than some believe. "We're starting to invest now, even though there's no real market for it today, so that when it comes, we're ready," Hastings says. "[But] DVD will last as long as the gasoline engine, newspaper--any of your 'obsolete' in the very long term industries." If he's wrong, those 42 million DVDs he owns will make for one heckuva yard sale.

© 2005