Why Netflix’s Decision To Turn Down Amazon’s Buyout Offer Changed Everything

The Netflix (NFLX) that is known today may have never come to be if co-founder Marc Randolph and Reed Hastings had decided to take Amazon’s (AMZN) offer for a buyout. Randolph detailed the experience in his new book, “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea,” which reveals how they decided to take a chance with their streaming service instead of becoming instant millionaires.

The book from Randolph, details that fateful 1998 meeting with Amazon CEO Jeff Bezos, who offered the two founders of Netflix a low eight-figure deal only two months into introducing the company, Yahoo Finance reported.

“We had been launched for maybe two months and we got that call that [Amazon founder and CEO] Jeff Bezos wants to see us. How exciting is that?” Randolph told YFi PM. “We were just starting out and everyone was telling us ‘that will never work.”

“And here was this guy who was the pioneer of e-commerce thinking he might want to buy us. What a validation!” Randolph added.

The meeting could have altered the lives of both Randolph’s and Hastings’ as they reportedly stood to bring in an offer that they thought would be in the $14 to $16 million range for a company that started off as a mail-order DVD service.

“On the way home we were looking at each other and saying ‘we could get out now if we want. But do we?’”

The decision would change how people via content and allow Netflix to become the media powerhouse that it is today. For Randolph and Reed, the decision to say no to Amazon’s offer would be difficult but would pay off in the future as the company became a household name that was synonymous with streaming.

“It was that chance to say ‘no, I think we’re going to give this a shot,’” Randolph told the news outlet. “Boy, I’m glad we did.”

Shares of Netflix stock were down 0.72 percent as of 9:34 a.m. ET on Tuesday while shares of Amazon stock were down 0.24 percent at the same time.