How Netflix Started
For many years, CEO Reed Hastings insisted that he got the idea for Netflix after Blockbuster charged him an outrageous 40$ late fee for losing an Apollo 13 DVD.
However, co-founder Marc Randolph confessed in 2014, that this actually wasn't true and it was more of a marketing ploy to create a story that people could connect with. Because, it clearly explained the benefits of Netflix over its competitors. Randolph states that him and Hastings got together in 1997, because they wanted to create the Amazon of something. So they decided on DVDs since they were cheaper to mail than VHS.
And even in 2019 Hastings is always changing his startup story. He Even said it came from solving a complex math problem. But, later he admitted that it really just started with a simple signal delivery service. But, either way the company was created in 1997 under the name Kibble, but obviously later it was changed to Netflix.
By 1998 they began renting DVDs by mail and then it was in 1999 when they started a subscription pricing where you could pay a monthly fee for unlimited DVDs delivered to your home. And of course there were no late fees. And there was a challenge at the beginning because most people didn't have DVD players in their homes at the time. But Netflix carried on and by 2002 they were doing $ 750,000 in revenue.
And it was also in 2002 when Reed Hastings asked Blockbuster to buy his company for 15 Million Dollars. And as the story Goes Blockbuster repeatedly refused this offer and then later they tried to start their own Netflix in 2008 which we know how that ended.
It was in 2007 when Netflix launched their online streaming service and 2010 when Blockbuster went bankrupt. And as of 2019 Netflix has over 160 Million people on their platform worldwide and the average person spends about 10 hours on the platform as opposed to amazon and hulu which is around 5 hours.
But the money lies in their exclusive original content which they just put 13 Billion Dollars towards for 80 new films and 700 new shows. And as for the DVD mailing service it is actually still running and in 2018 they had about 3 million subscribers. and this is backed up by Netflix's latest evaluation in 2018 of $151 Billion.
And that's how Netflix started. Thanks for watching my video. If you enjoyed it please subscribe to me on youtube and follow me on Instagram @austindanielpatry