In an interview Netflix CEO Reed Hastings said:
“We took out our spreadsheets and we figured we’d get 14 megabits/sec to the home by 2012, which turns out is about what we will get.” So what does his spreadsheet tell him about the next ten years? “If you drag it out to 2021, we will all have a gigabit to the home.”
“If we had tried to launch streaming in the beginning,” says Hastings, “I’m sure it wouldn’t have worked because we couldn’t have written big checks. Now we can write a $50 million or $100 million check which gets the content flowing. As we get more subscribers, we can write bigger checks.”
Hastings was clear that the impact of Moore’s Law would push Netflix’s streaming goals forward.
Moore’s Law
Moore’s Law refers to Moore’s perception that the number of transistors on a microchip doubles every two years, though the cost of computers is halved. Moore’s Law states that we can expect the speed and capability of our computers to increase every couple of years, and we will pay less for them.
Another example is that today’s smartphone has more computing power than NASA’s 1960 supercomputer!
To give you a better perspective the first NASA computer was contained in a box measuring 18.9 inches high by 14.5 inches wide by 12.75 inches deep, weighing 58.98 pounds.
To get an even greater idea of the impact of speed consider this:
IBM, founded in 1896, took 45 years to reach a billion 2020 dollars in revenue. Hewlett-Packard, founded in 1939, took 25 years. Microsoft, founded in 1975, took 13 years. Now the norm for fast-growing companies is 7 or 8 years.
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