We have all watched Netflix once in our lifetime. Some of us use it more than others and some of us don’t even have any other paid TV services. But how did it all begin? We’ve had the service in South Africa for just under two years now, but it has been around for much longer than you think.
CEO Reed Hastings got the idea originally when he decided to try to send a DVD to himself via mail. You see, back in the late 90s, Netflix was a service that shipped you DVDs if you wanted to buy them. In 1998 the company opened as the world’s first online DVD rental store with 30 employees and 925 movies. At the time, Netflix was directly competing with Blockbuster but the difference was that Netflix actually shipped the DVDs to people.
Two years later Netflix was not doing so well. The high cost of shipping and the high cost of its monthly membership was not enough to cover costs. Blockbuster even sought to buy the company for $50 million. Back in the early 2000s, DVD machines were expensive to buy and Netflix was just not getting enough customers to join the service. In 2001 everything changed when the dot-com bubble burst and the internet exploded into a giant hub of information. DVD machines also became cheaper and more people wanted to experience this disc-based movie lifestyle.
By the end of 2002, everyone had a DVD machine and everyone wanted movies. Netflix’s business offerings catered to millions of Americans who were in this boat and for the first time in seven years, the company boosted its first profit during its 2003 profit earnings. By the end of 2005, Netflix had 35,000 different films available and shipped out 1 million DVDs to customers every day.
In the mid-2000s, the company planned on launching a movie box called the “Netflix box” which would connect to the slow internet of the day and download your movie overnight. However, when YouTube become so popular, the company decided to jump on the internet bandwagon and develop a streaming site that would offer the same service as their DVD system but without the shipping.
The concept of Netflix.com was done by 2007 and it launched in the same year. At the same time, the DVD rental service dropped drastically due to the new service but it managed to ship its billionth DVD. The company now boasts $100 billion market capitalization and is slowly becoming the largest digital media and entertainment company in the world. The service has over 118 million subscribers worldwide and they grow daily as the service becomes better and better and rolls out in new countries.