BLOG POST #7

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Netflix 

Netflix was founded on August 29, 1997 in Scotts Valley, California by two entrepreneurs, Reed Hastings and Marc Randolph. Netflix is a subscription- based streaming service that allows its members to watch movies and TV shows without commercials on any internet connected device. This revolutionary entertainment service took the world by storm. It is now the go to place for TV and movie streaming, providing its services to millions of people. Coming in as the largest streaming video subscription service in the world, Netflix is available for streaming in over 190 countries. To add to that, they have roughly 209 million global paid memberships. So, how did it all begin?

Early Beginnings 
The idea for this company was inspired in the 1990's when co-founder Reed Hastings was charged a $40 late fee from Blockbuster for an "Apollo 13" movie. During this time, Blockbuster dominated the home entertainment market. You would simply have to go to the store pick out any movie you wanted to watch that week and then when you were done just return it to the store you got it from. Hastings' frustration with the inconvenience of rental processes along with the fact that customers had to return rentals to stores themselves created a spark of inspiration. This every day problem led to the birth of the Netflix we all know and love today.

In 1998, Netflix.com was launched as the world's first online DVD rental and sales site with only 30 employees and 925 titles available. It wouldn't be until 2000 that a partnership with Blockbuster would be proposed. Since Netflix delt with rentals, they primarily relied on the US Postal Service for these deliveries which gave them a $57 million loss. They offered Blockbuster to buy them for only $50 million and in return, Netflix would rename to Blockbuster.com and handle the online business while Blockbuster would take care of the DVDs so they could become less dependent on the US Postal Service. Blockbuster ended up turning down their offer and later would learn to regret it. 



Increase in Popularity 
In 2002 to 2006, Netflix's subscriber count increased from 1 million to around 5.6 million. Every year they saw even more increases ending up with 14 million subscribers in 2010. Most of this growth was ignited by the fast growth of DVD players in households. With Netflix's streaming business growing so quickly, it had shifted from the fastest growing customer of the US Postal Service to the largest source of internet streaming traffic in North America.

Netflix's logo change over the years

By February of 2007, the company began to move away from its original business model of DVDs and introduced video on demand via the internet. The big mile marker hit Netflix on January 22, 2018 when they crossed the $100 billion market capitalization. This made the company the largest entertainment and digital media platform in the world. 


As you can see the development of this house hold favorite service had a very interesting background. It started from just an idea and expanded into what we see today. Like I said, Blockbuster would live to regret turning down Netflix's offer. In 2010, Blockbuster would declare bankruptcy due to its inability to adapt and move away from the DVD services. As of today all of their stores are shut down except one in Bend, Oregon while Netflix continues to thrive and produce money every day.












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