• Netflix: The world’s first online DVD rental company
• The first Netflix original was released in 2012 – today the Netflix in-house productions are even Oscar winners
• With COVID-19, Netflix user numbers are increasing under CEO Hastings
Today, Netflix is a world-renowned streaming service provider. The company’s website states: “Netflix is a streaming service provider whose members can enjoy a diverse range of award-winning series, films, documentaries and more on thousands of Internet-connected devices”.
The Netflix idea, however, came about more than 20 years ago: In 1997, the two US company founders Reed Hastings and Marc Randolph wanted to set up an online DVD rental company, as Forbes reports. They tested whether it would work to send DVDs by post, and by 1998 Netflix.com was the first online DVD rental company. Marc Randolph was initially CEO of the company.
Netflix subscription with no return period and the exit of Marc Randolph
Another year later, the subscription option was already available: customers who bought a Netflix subscription did not have to comply with return periods, monthly limits or late fees. In 1999, according to Forbes, Randolphs resigned his position as CEO and Hastings took over – he remains CEO of the company to this day.
In 2000, a system for individual recommendations was introduced, as we know it from the streaming service today, and just five years after the company was founded – in 2002 – Netflix went public with the ticker symbol NFLX. The price for a share at that time was 15 US dollars.
In 2003, Netflix broke the one million user mark and patented its subscription system with the US Patent & Trademark Office. In the same year, Randolph left the company completely and specialized in mentoring for startups.
Streaming partnerships and the multi-user profile system
Two years after Randolph’s departure, Netflix developed the profile system for multiple users of one account, which, like personal recommendations, is still used in streaming today, and which proved its worth immediately: in 2006 there were already five million Netflix users.
Online streaming was introduced in 2007, and partnerships with electronics manufacturers followed, allowing streaming to Microsoft’s Xbox, Blu-ray players and TVs with internet access. In 2009 there were already 10 million users, and in 2010 it expanded to Canada. Adding streaming to mobile devices and special offers just for kids, Netflix finally expanded to Latin America and the Caribbean in 2011. The Netflix buttons on TV sets became established.
25 million users: Now the Netflix originals are coming
In the following year, 2012, Netflix recorded user numbers of over 25 million for the first time, which prompted expansion into the first European countries. That year also saw the release of the first Netflix Original show: “Bill Burr: You People Are All the Same”. Is the New Black” and “Hemlock Grove”.
With “House of Cards”, winner of three Emmy Awards, Netflix created the first streaming-only series. Finally, in 2014 there were 50 million users and Netflix also came to Germany.
With the first original films and productions in non-English languages, Netflix continued to expand so that the streaming platform is now available to users in 190 countries worldwide.
The first Oscar and the 100 million mark
In 2017, a Netflix film was awarded an Oscar for the first time: After “The White Helmets”, many other Netflix originals have now been honored with Oscars. Also in 2017, Netflix surpassed the 100 million user mark, the production of interactive stories was added and finally in 2019 new production sites were founded in London, Madrid and Toronto.
The company’s stance is described on the company’s website today: “Entertainment, like friendship, is a human need […] We want to entertain the world. When we do that, there’s more laughter, more empathy, and more joy [auf der Welt]”. Accordingly, the terms and conditions are also quite user-friendly: A subscription in Germany costs between EUR 7.99 and EUR 17.99 per month, series and films can also be watched offline and the subscription can be canceled at any time a certain period of time, his account will be frozen and no more money will be collected.
Netflix: Sales and user numbers increase with the pandemic
According to the company, the employees also enjoy respect and a good working atmosphere: According to the motto that too strict rules and bureaucracy can be an obstacle to success at work, there are no fixed holiday or parental leave regulations. According to the company website, time-consuming committees are avoided. There is also an open culture of discussion and employees who sometimes suggest unconventional solutions are valued.
And this way of working, led by CEO Reed Hastings, produces successes: In the last few years, revenue and sales have increased, in 2019 the Annual Report reported revenues worth over 20 billion dollars – last year it was just under 16 Billion dollars. Almost half of the sales are made in Canada and the USA, and: The percentage of operating costs has fallen constantly in recent years. In 2019, it was only 62 percent of revenue.
Netflix shareholders are also pleased with the quarterly figures: With the beginning of the COVID-19 pandemic, the number of users – and thus the number of subscription buyers – went through the roof.
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