In just 22 years Netflix has gone from being a DVD rental service to the most subscribed platform on earth. Netflix is now worth over $125 billion. In 2019 Netflix made $20 billion which was up by $4 billion from the previous year. With its astonishing growth year over year it’s no surprise that Netflix accounts for 15% of the world’s internet traffic but how did Netflix become the behemoth we all know in love?
Origins
Rumour has it, Reed has to pay a $40 late fee on a movie he rented, fearing what his wife would think about having such a steep late fee he knew there had to be a better way around this and Netflix was the solution. Reed Hastings and Marc Randolph founded Netflix in 1997. It was merely a startup rental business. Netflix would rent DVDs over the internet which made it convenient and unique. Every competitor overlooked Netflix thinking it was overly ambitious but Netflix were visionaries they were always ahead of the game. The reason for Netflix’s success isn’t luck or good timing but rather they understood their market and knew they would have to evolve to survive and grow
Netflix through the years
1997: Netflix launches its DVD services with a 7-day maximum rental policy. Initially, Netflix had only 900 titles by 1999 had 3100 titles and by 2000 had a whopping 5200 titles.
1999: Netflix announces a $16 monthly subscription, members could rent up to 4 movies at a time with no return date
2000: Netflix abandons late fees and returns dates in favour of monthly subscription priced at $20 a month
2002: Netflix goes public with shares valued at $15
2000-2006: Netflix sees rapid growth but still operates in losses due to rapid expansion. They also improve on the UI making it easier and more accessible
2007: Netflix starts its streaming service. Note at this point demand for streaming services were little to none. Competitors thought Netflix killed themselves
2008-present: Netflix dominates the world. Seeing staggering growth year after year. In 2013 Netflix debuts its first high profile original production. This is when Netflix started captivating audiences. Their deep narrative-focused films and shows being exclusive to their platform helped get an edge over their competitors. From there Netflix started investing more and more in its originals and has proven to be a massive success.
What's next?
With many new competitors entering the market could Netflix see its demise? Netflix has been losing a small market of its audience as networks pull down their shows from Netflix to start their service. What other streaming services don’t get right is that Netflix isn’t popular for the number of shows it has sure it plays a big part in their success but rather the quality of its originals and the user-friendly atmosphere it has created. The UI is easy to understand and navigate through its simplistic design is pleasing and is much better compared to other platforms. Last year Netflix spent $17 billion to increase and improve its originals. Nothing doesn’t seem to be slowing down and continues to provide a wonderful experience for its users. Furthermore, Netflix is spending billions on acquiring new shows and movies for us to enjoy. Competitors have a long way to go before being able to take down the behemoth that is Netflix. Competition is always good as it forces companies to think out of the box to gain an edge, so hopefully, shortly, we can see improvements to not only Netflix but other platforms as well.
Writer: Atif Agboatwala
3/07/2020
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