History of Netflix

History of Netflix

1997 – 1999

When Netflix started, Marc Randolph and Reed Hastings, the company’s founders, came up with the idea of an online movie rental service in 1997 in Scotts Valley, California. The company started out with only 30 employees and 925 titles available, which was nearly the entire catalog of DVDs in print at the time.

Netflix used a pay-per-rent model with rates and due dates. The cost of a rental was around $4, plus a $2 postage fee. Netflix decided to switch to a subscription e-commerce model after experiencing significant growth in 1998.

In 1999, Netflix came up with a new business model that included three different innovative ideas to survive and address customer challenges:

The Home Rental Library, which allowed customers to keep four DVDs (as rental movies) on their shelves at home for as long as they wanted
Customers built their own ‘queue’ to Netflix movies they wanted to watch through serialized delivery. Once a customer returns a movie, Netflix automatically broadcasts (or ‘auto-magically,’ as they called it) the next movie on the list
A fixed monthly payment of USD 15.99 included four movies at home and the ability to switch to new movies on a regular basis.
The new model outperformed the old transaction-based rental model. 80% of customers who were presented with the subscription e-commerce model chose to purchase one leading to a high conversion rate.

2000 – 2006

Are you wondering what Netflix movie should I watch next? Netflix launched a personalized movie recommendation system in 2000. A user-based rating was used in this system to accurately predict Netflix members’ choices. The number of Netflix subscribers had risen to 4.2 million by 2005.

On October 1, 2006, Netflix announced a $1 million prize for the first developer of a video-recommendation algorithm that could outperform its existing algorithm Cinematch by more than 10% in predicting customer ratings.

2007 – 2012

By 2007, the company had decided to abandon its original DVD-based business model in favor of video on demand via the internet. They decided to stream their content on Xbox 360, Blu-Ray disc players, and TV set-top boxes as part of their internet streaming strategy. The ventures also partnered with these businesses to stream their content online.

Netflix made its services available on a variety of Apple products, the Nintendo Wii, and other internet-connected devices when they launched in Canada in 2010. Netflix begins producing original shows in 2012. Lilyhammer premiered first, followed by House of Cards in 2013. Since then, it has produced over 1900 originals, many of which have become hugely popular and have won numerous awards, such as Squid Game and The Crown.

2017 to 2021

Netflix subscription e-commerce was unstoppable after that, and today has a global presence in the video-on-demand industry. Netflix reached 100 million subscribers worldwide in 2017. Netflix 2021 had 209 million subscribers in 190 countries. North Korea, Syria, China, and Iran are exceptions. It has over 15,000 titles in all of its international libraries.

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