The Rise Of Netflix: How A DVD Rental Company Revolutionized Entertainment

Netflix started off as a DVD rental company and in a few decades revolutionized the entirety of entertainment,

Television without Netflix is unfathomable. It’s hard even to remember what the TV viewing experience was like before Netflix changed the whole game. Today, Netflix’s entertainment-laden streaming has a massive influence on our daily TV consumption.

‘Netflixing’ is to entertainment what ‘Googling’ is to online search. Binge-watching is a phenomenon invented by the Netflix community where there’s no end to content consumption. What began in 1998 as a DVD rental company has transformed into an ecosystem of online entertainment catering to a global audience.

As the Netflix addiction rages on, let us take a sneak peek into how Netflix won the streaming wars and became the crown jewel of today’s entertainment industry.

Humble Beginnings As A DVD Rental Firm

Netflix is a perfect example of how a company achieved unparalleled success despite changing its business model multiple times. Each time the company tried something new, it was rewarded with huge success by its customers.

Back in 1998, Netflix began operations in California by offering movie DVDs via mail-order throughout the USA. Back then, users could pay between $4 to $6 to rent any movie and return the same after watching. Founders Marc Randolph and Reed Hastings quickly realized that the subscription model is better than the ‘pay-for-use concept and shifted focus towards building an on-demand online entertainment business model.

After tasting success in the initial few months, the company was ready to give a huge competition to the industry giant ‘The Blockbuster.’ The refusal to move towards the subscription model cost huge losses to Blockbuster, which ultimately went bankrupt in 2010.

The subscription concept worked wonders and, over the years, made Netflix the ‘De-Facto’ entertainment platform in the world. Today, Netflix streams diverse online content to over 150 million customers worldwide. At the push of a button, users can watch almost anything ranging from documentaries, movies, series, and videos in multiple genres and languages.

Despite new entrants in the market, such as Hulu Plus and Amazon Prime, Netflix reigns king of entertainment. There’s simply no match to Netflix’s on-demand entertainment that has viewers hooked globally. Currently, Netflix boasts $250+ billion in market cap and a soaring share price. The journey to worldwide dominance has been built upon innovation, customer feedback, and creative entertainment.

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Crowned The King Of Entertainment

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Netflix continues to be successful year after year. That’s because the underlying culture of innovation and rewarding creativity is still evident in its day-to-day operations. From intriguing original TV series to industry-wide collaborations, Netflix has evolved every time an opportunity presented itself.

Happy employees are the key to every organization’s success, and Netflix has lots and lots of them. Who wouldn’t love unlimited paid vacations? Yes, Netflix rewards its employees with amazing policies and remuneration that ensure a high retention rate. The company rates an employee’s performance in terms of creative output and not by how many hours they spent on the chair. In return, the employees unleash their creative talent to create stunning entertainment that the audience loves to gulp. No surprise that Netflix employees are rated high on team spirit, morale, and responsible productivity.

Netflix’s Timeline – A Glimpse into Major Milestones

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Netflix launched its DVD rental services in 1998, then in 1999 its switched to a subscriber-based model at low monthly prices. In 2000, Users got personalization for subscriptions. Two years later, in 2002, Netflix made a public offering at $15 a share. Later, in 2004 Netflix’s user subscription touched the 2 million mark and reached 5 million in 2006. 2007 saw the introduction of the video streaming services named ‘Watch Now.’ In 2009 PlayStation and smart TVs integrated Netflix, and in 2011 Qwikster debacle rocked Netflix, which cost the company 600,000 subscribers.

Netflix reached the UK and European countries in 2012, and its total users touched 25 million. In 2016 Netflix was available in 130 countries across the globe, and the following year, Netflix won the first Academy Award for ‘The White Helmets.’ This year the streaming service hit another milestone by gaining 180+ million subscribers and winning multiple global awards.

The Beginning Of The Netflix Mania

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So, what does the future have in store for Netflix? Well, the competition is certainly picking up pace, and the fragmented user base poses a challenge. Services like Amazon Prime and Hulu are increasing their subscriptions and offering more or less similar streaming experiences.

To its credit, Netflix has built an impressive library of original TV series and movies over the years. The strategy is to enrich its library with its unique content that users love and focus on producing more original series. Going forward, the company may go for an advertising model in addition to strengthening its content library.

Netflix has weathered many storms in the past. It would be wise to assume that the king of the entertainment industry has already anticipated future events and will tune accordingly. Till then, there’s no escaping the fact that the global audience is in love with Netflix.

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Source: Forbes, Investopedia, Britannica

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