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    How Steve Jobs Scared Netflix Away from Innovation

    Written by

    Adam Clark Estes

    We all remember Steve Jobs (RIP) fondly, and we thank Steve Jobs (RIP) humbly for the very expensive, very well designed, and inevitably very revolutionary products that he helped invent. We also remember that Steve Jobs was sort of a jerk. At least, that's what everybody who ever worked for him says. Now, as the dawn of the post-Job era turns to midday, we continue to learn how the Apple visionary didn't just bully his employees and his competitors. He bullied his partners, too.

    Take the recently reported story about Netflix's top secret "Griffin Initiative." Put simply, the Griffin Initiative — named after Tim Robbins' character in The Shawshank Redemption — involved building a set-top box that would stream Netflix content directly to your living room. This was before you could watch Netflix on your Xbox, before you could access your account through a Roku box and, in a very relevant way, before Netflix was on Apple TV.

    After years of development and several trips to Foxconn to work out the details of manufacturing the box, Netflix chief executive Reed Hastings pulled the plug on the entire project. Why? He didn't want to piss off Steve Jobs. "Reed said to me one day, 'I want to be able to call Steve Jobs and talk to him about putting Netflix on Apple TV,'" a senior executive told Fast Company. "'But if I'm making my own hardware, Steve's not going to take my call.'"

    Netflix employees were floored. "Reed sent a note to the VP group saying, 'Here's the decision we made,'" recalls Steve Swasey, Netflix's former VP of communications. "I remember exactly where I was standing when I read that note. My jaw dropped. We literally had people in studios that day shooting advertising, and everything just stopped. It just stopped. I was saying, 'We're so close! Why don't we launch it?" Because Steve Jobs, that's why.

    The power play isn't that surprising. Jobs was known to hold grudges, even against his own employees, and this apparently happened quite often. One time, after a bad review of MobileMe popped up in the papers, he called the team into the auditorium. "Can anyone tell me what MobileMe is supposed to do?" He asked. When a someone had given him a suitable response, Jobs bellowed back, "Then why the fuck doesn't it do that?" And then he fired the head of MobileMe, right in front of his entire team.

    Jobs was also not averse to intimidation tactics. In 2007, probably around the same time that Netflix was putting the finishing touches on their doomed set-top box, the Apple CEO caught wind of the fact that Palm was trying to poach some of his employees. With characteristically bristly tact, Jobs wrote to Palm's CEO at the time and threatened to slap their company with a patent litigation lawsuit if they didn't stop their poaching. No wonder Hastings was scared of crossing Jobs, and who knows what the two talked about behind closed doors. 

    In the end, Jobs successfully scared Hastings away from getting into the hardware business. Netflix ended up spinning off the Griffin technology to Roku, and Apple ended up including Netflix in Apple TV's suite of apps. Though the debacle stonewalled one of Netflix's routes to innovation, it also opened up a new one. If Jobs hadn't bullied Hastings, who knows if the company ever would've released its super successful streaming service. The same Netflix executives who were floored when Hastings pulled the plug on Griffin later praised Hastings for the decision, despite the fact that he went over everybody's head to make it. Sounds like something Steve Jobs would do, doesn't it?