After selling a successful business venture, Reed Hastings and Marc Randolph were discussing what type of business they wanted to invest in next. While Randolph admired the then-fledgeling company Amazon, Hastings considered shipping VHS tapes either for sale or for rent after being charged a late fee for a movie rental.
The pair decided that VHS tapes were bulky and easily damaged in shipping, however, they were intrigued by a new technology called dvds. While these were limited in number at the time, both partners agreed that these would be easy to ship and cheap to replace if damaged.
The Netflix website launched in 1998 with only 30 employees and 925 DVDs. The pair introduced the monthly subscription pricing model in 1999. Since 2000, the company dropped all shipping charges, late fees, and dates need to return movies.
The company went public on the NASDAQ under the ticker symbol: NFLX in 2002. As of 2017, Netflix shares are mainly held by institutional investors, including Capital Group Companies, BlackRock, and The Vanguard Group, among others.
By 2005, the company had more than 35,000 different films available and was shipping 1 million DVDs per day. Although the company states that they always considered the online viewing of movies, it wasn’t until the mid-2000s that data speeds allowed this type of technology.
In 2010, the company expanded their service to Canada. In 2011, the company debuted the “Netflix” button on numerous remote controls, allowing for one-touch connection with the service, eliminating the need to re-enter passwords or user names.
Netflix has been one of the most successful dot.com ventures. The company claims more than 117 million subscribers around the world, and an annual revenue in 2016 of $11.69 billion.
The company stated they wished to have at least half of all content available on their streaming service to be original content. The company continues to produce numerous, successful movies, series, and live events. Multiple petitions calling for the removal of the documentary “After Maria”, which depicts what happened to Puerto Rico after Hurricane Maria in 2017, stating that it didn’t accurately reflect the Puerto Rican people.
Netflix currently services the USA, Canada, Mexico, South America, the United Kingdom, Ireland, and several Nordic countries.