When you think Netflix, you think binge-watching movies and series! Starting out as a small DVD rental site, Netflix has come a long way to transform itself to becoming an internet giant. Netflix is the world’s leading streaming entertainment service.
Netflix is a combination of ‘Net’ in the word ‘internet’ and ‘Flix’ which is a variation of ‘flick’, abbreviation for movie. Netflix was founded on August of 1997 by entrepreneurs Reed Hastings and Marc Rudolph as an upstart DVD rental business. The now two-decade old startup has transformed from renting movies to making them one of the biggest TV and movie studios globally.
What did Netflix’s innovation journey to become a $100 billion company in just 20 years look like?
Originally, Netflix began with a rent-by-mail DVD model. At the time of founding Netflix, video rental stores dominated the home entertainment market. Netflix invested in the opportunity to do rentals differently and introduced renting out DVDs by mail. Users would order films via internet from the website and have them delivered to their door. Netflix took over their initial competitor, Blockbuster who at the time offered DVD rental at their rental stores, by shifting to subscription service. Netflix changed its pay-for-use model to a subscription model delivering on-demand entertainment that allowed you to watch your favorite shows at anytime and anywhere you want. Similarly, Netflix rebranded and the logos changed over the years.
Following the initial success of the rental model, Netflix went public in 2002 with around 600,000 members subscribed and by 2003 had grown its customer base to 1 million subscribers. At the time, the stock was worth less than $2 a share. The introduction of streaming service in 2007 marked the biggest turning point for Netflix. Netflix introduced the ‘Watch Now’ concept with initially 1000 titles and changed the way people spent their free time by allowing users to watch content online instantly.
In the years 2008 – 2010, Netflix went on to partner with different electronic companies and devices including Xbox, Blu-ray disc players, PS3, Apple devices to allow streaming on those devices. The company introduced a streaming-only plan as it expanded beyond the United States. Netflix made an announcement to split its streaming services and mail-based services in September 2011. The mail-based services was known as Qwikster. A month after the announcement, Netflix abandoned the split due to outcry from subscribers. By 2012 – 2014, Netflix expanded into Europe and rebranded its logo reinventing itself as a TV and movie studio.
Netflix began to develop their own production and shows in 2013 with the episodic drama series House of Cards marking the first of Netflix Originals. This was based on Netflix’s analysis of their customer’s data that provided a better understanding of their customers’ interests. As of 2016, Netflix had expanded to over 130 countries and offered streaming services in 21 different languages.
Evidently, Netflix success in the entertainment industry is unmatched. The Netflix model is constantly evolving to better serve its over 100 million customer base. Just recently, the company rolled out a new recommendation algorithm serving unique images to all its customers and knows exactly which images will make you want to click play.
You may also like…
Why no more boring cars from Toyota? – Boring has been working well for Toyota for the past 5 decades. Why fix something not broken?
Where did Airbus go wrong with the A380? – Why did A380 not even achieve the shadow of what Boeing 747 achieved?
