From DVD rental to household name – A Netflix story

Netflix has had quite a journey since it’s inception in 1997. Starting out as a DVD rental service by Mark Randolph and Reed Hastings back in 1998, offering a hassle-free rental service without due dates, late fees or shipping fees. The mass popularity of Netflix might be quite recent, but Netflix was already a known name in the home video sales and rental industry by 2000 as it was offered to be bought out by Blockbuster for 50 million USD. In 2002, Netflix initiated an IPO selling and by 2003, Netflix posted its first profit during fiscal year 2003.

By 2005, Netflix already had a whopping 35,000 movie titles and shipped out a million DVDs everyday.

Moving into the internet

At the peak of its popularity, YouTube was just getting popular. And Netflix saw its potential in the content streaming market. Initially planning to offer a hardware called the “Netflix Box”, plans were scrapped after witnessing the demand for video streaming despite the bandwidth constraints for streaming a movie.

The project of implementing a streaming service was completed by 2007 and it was smooth sailing from there. Within five years, Netflix added a total 27 million US streaming customers to its streaming service. By September 2014, Netflix moved out to 40 countries across the world and finally realized that the company needed to re-brand itself yet again in an ever-changing world.

The journey didn’t stop there, as Netflix announced its plan to expand into 150 countries. On April 2017, Netflix reached 100 million subscribers partnered with a Baidu-owned streaming service, starting its much awaited venture within China.

Finally, in 2018, the company crossed 100 million USD in market capitalization, becoming the largest media and entertainment company in the world, with the exception of Comcast and Disney. And a few days ago, Netflix announced its plans to release 80 original movies in 2018.

Taking on entertainment Goliaths

Why and how did Netflix turn into one of the biggest media and entertainment company within twenty years against companies as old as a century?

Ability to look forward into the future of the entertainment industry played a pivotal role in the growth of the streaming service. Netflix could’ve just retired as a DVD rental company, but its no secret that at the peak of its DVD rental service growth, Netflix recognized and implemented proper plans for its future. Being stuck in the past is a common reason for prominent companies slowly fading away.

Netflix also completed several deals with known production houses for hosting their content. After gaining a solid subscriber base, Netflix decided to open its own production house, striking up a deal with the most profitable superhero film production house, Marvel – producing several brilliant TV shows under its banner.

Cult status

Expanding a company is no easy task, and Netflix has waited quite a long for the market conditions to be favourable. From 1997 to 2018, it has been a long journey for Netflix. With several buyout offers and change in administration, the company didn’t flinch until it reached cult status. Be it through the “Netflix and Chill” memes or the convenience of the service reaching the affordability for the first world middle class, it can be called a role model for reaching sustainable success. Netflix has recently decided to invest 8 billion USD for producing over 700 shows in 2018. From your friendly DVD shop to revolutionizing the international media industry, it has been quite a journey as they rose to the top while facing continued aggression from Asian competitors.

Lessons in Business

Marvel, Netflix and the future of streaming

Using resources from others is definitely a great way to start out your business, but a successful entrepreneur has to know when to produce one’s own resources in order for the business to grow.

Without any doubt, Netflix is a successful startup; a company with a brilliant concept that is bound to be successful in a market full of competitors. Through word of mouth and sneaky marketing, Netflix has slowly taken the place of Blockbuster in the era of internet. Recognizing a changing business landscape for its industry is something Netflix definitely got right as evidenced in its evolution thus far.

Using resources from others is definitely a great way to start out your business, but a successful entrepreneur has to know when to produce one’s own resources in order for the business to grow. 

The next big step was implementing Netflix Originals. Netflix understood that copyright and distribution issues made their content unavailable in some regions and there was no way around it. As a result, Netflix started producing their own content and currently it has expanded into a multi-billion dollar segment.

Even half a decade ago, a mere fraction of the internet was aware of Netflix. Today, through smart move after move, Netflix has become the most relevant media player in its industry. Certainly, this story has been a fairy-tale for a startup with one feet in the grave to being a titan of the entertainment industry.

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