How and when did Netflix start? The origin story

Netflix is a billion-dollar production company and subscription streaming service which has grown into a giant in the entertainment industry over the last 25 years. They have managed to evolve and stay relevant despite ever-changing landscapes.

With a business that spans over 190 countries and boasts millions of subscribers around the world, Netflix has ensured that it will have a long-lasting impact when it comes to home entertainment. Every one of us has a subscription or shares one with family or friends and has enjoyed the vast library of films and series on offer so it’s worth taking a look at how all of this came to be and what decisions brought it to this stage.

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Image source: Netflix

The humble beginnings

It all started with a scientist and salesman, as Reed Hastings and Marc Randolph founded Netflix on August 29th, 1997. The idea came to them during a carpool trip as they were discussing the impact of Amazon.com and how they wanted to find their category of portable items to be sold on the internet.

After passing on VHS tapes, they settled on DVDs which itself were first launched earlier that year. After a successful trial run of sending a compact disc to Hasting’s house, they concluded that this would be a viable and hopefully profitable venture. Just a year later, Netflix.com was launched as the first  DVD rental and sales site with close the 925 available titles.

They began offering monthly subscriptions that were devoid of restrictions such as due dates, late fees, or rental limits.

Randolph and Hastings even received an offer from Jeff Bezos to buy Netflix for a figure between 14 and 16 million dollars but Hastings turned it down.

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Image source: Netflix

Entering the 21st century

Going into the 2000s, Netflix had some bright ideas including a recommendation system based on user ratings of past titles but the financial growth was not justifying their costs and they briefly considered cashing in.

They offered to sell Netflix for $50 million to Blockbuster CEO, John Antioco, who quite cruelly laughed at their offer and told them the internet craze was just a fad that wouldn’t amount to much in the future. What a key moment that turned out to be.

The company experienced a slow upturn in fortunes in 2001 before officially becoming a publicly-traded company in 2002. The following year, Netflix was issued patents by the U.S. Patent & Trademark Office to cover its subscription rental services as the subscriptions began to rise phenomenally.

2003 was also the year that experienced significant change at the top, as Randolph decided to leave Netflix and sell his shares in the company. He stated that he always prefers working in the ‘start-up’ stage of any venture.

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Image source: Netflix

The birth of streaming

After steadily building their subscriber base and posting millions of dollars in profits in the next few years, Netflix decided to launch a streaming service, offering video-on-demand via the internet in 2007. The first trial took place in Canada with a library of close to 1000 titles.

In 2006, the ‘Netflix prize’ was announced. $1,000,000 would be awarded to the first developer of a video-recommendation algorithm that could beat its existing algorithm Cinematch. In 2009, that prize went to the team Bellkor’s Pragmatic Chaos for improving the accuracy of recommendations by 10%.

That year also saw the figure of streams by Netflix overtake their DVD rental figures. From 2010 onwards, Netflix began the global expansion of its streaming service with Canada being the first outside recipient as the feature also became available on mobile phones for the first time.

In 2010, AMC series ‘Breaking Bad’ became the first beneficiary of the ‘Netflix effect’ as the addition of earlier seasons to its library saw a great expansion in audience by the time the fourth season was released, almost doubling viewership in the fifth and final season.

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Image source: Netflix

Producing original content and critical acclaim

In 2012, Netflix ventured into the stand-up scene by producing a special in collaboration with Bill Burr called ‘Bill Burr: You People Are All the Same’. The first original series line-up from the streaming service came out in 2013 with projects like ‘LilyHammer’, ‘House of Cards’, ‘Hemlock Grove’ and ‘Orange is the New Black’.

Netflix has also been known to renew formerly concluded series such as ‘Arrested Development’ and acquire several series that have been dropped by the original distributors such as ‘Young Justice’. By the end of 2016, Netflix was available in over 190 countries as membership closed in on 100 million.

They set up headquarters at key locations around the world, cementing their legacy as a global enterprise.

Netflix projects have earned several nominations and academy awards for their productions and their overall output when it comes to original features is unmatched with it being reported that they produced over 371 original moves and series in 2019 alone.

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Timeline of Netflix milestones.

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