Netflix was secretly working on a streaming box back in 2007 -- and the reason why it was killed right before launch says a lot about the company's success

Reed hastings netflix ceoGetty/Scott OlsonNetflix CEO Reed Hastings.

In 2007, Netflix was just putting the finishing touches on its own streaming device, a box that would have been Netflix’s version of the Roku or Apple TV.

The company was so close to releasing it that they had begun to shoot promotional videos that were to appear on the website, according to Netflix’s former director of global marketing Barry Enderwick.

Lots of time and money had been sunk into the development of the device, but Netflix decided to kill it. Why? Because Netflix’s vision had become bigger.

“Our strategy was to have Netflix on every device capable of connecting to the Internet,” Enderwick explains. “To do that, we would have to convince major brands like Samsung, Microsoft, and Sony to include Netflix on their Blu-ray players, game consoles, and streaming devices.”

These brands wouldn’t be so eager to work with Netflix if the company was trying to compete with them on hardware.

“Hardware was an industry that we had no internal knowledge of until we hired Anthony Wood, CEO of Roku,” Enderwick says. It wasn’t their specialty.

That doesn’t mean that Netflix’s streaming box would have been a flop, but Netflix’s leadership decided it just wasn’t worth it to compromise the company’s long-term plan, which would need the support of prominent hardware companies.

If it had been released, a Netflix streaming box would have faced competition from the Apple TV, which launched in 2007, and later the first Roku, which was released in 2008. And it would have been interesting to see whether a Netflix box would eventually have expanded to stream competitors like Hulu or HBO.

But Enderwick says the takeaway from the death of the Netflix box isn’t any speculation about what could have been had Netflix gone into the hardware game. The lesson is shows is that a company should always do what’s best for long-term strategy, even if this choice causes short-term pain.

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