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Reed Hastings offers online DVD rentals
Hastings was annoyed for having to pay more than $40 in Blockbuster video late fees. In 1997 Reed Hastings started Netflix and offered online rentals of DVDs. In this time commercial internet was in its infancy. -
Monthly Subscription Model
The1999 roll out of the monthly subscription helped boost Netflix's customer base. The subscription-based business model included unlimited rentals for a single monthly rate with no late fees. Streaming impacted American culture regarding what people watched and why. Was it popular, did it have 5 stars, did you co-workers see it and talk about it? Word of mouth no doubt played a role in popularizing some series and shows. -
Netflix Losing Money
The dot-com bubble (rapid rise in U.S technology stock equity) was in full swing and Netflix was losing money. Hastings offered 49% of Netflix to the rental giant Blockbuster who turned him down. By 2004 Blockbuster began online rentals, but it was too late. Netflix survived the dot-com bubble and had a strong brand identity. -
Netflix Goes Public
Netflix survived the dot-com bust and in 2002 the company was profitable. The company went public selling 5.5 million shares $15.00 each. -
Content Streaming
Netflix was on the forefront of the wave of disruption to the TV industry. The company began streaming content over the internet. Streaming of all Netflix content was made available on multiple devices from mobile phones to tablets and game consoles. Their most popular original drama 13 Reasons Why, series dealt with serious issues of teens, including suicide, gossip, innuendo, bullying, and sexual assault. The show impacted American culture bringing forth awareness to suicide rates among youth. -
Netflix International Expansion
Netflix began in 2010 and expanded into Canada. Netflix went from operating in 50 countries to expanding into over 190 countries as of today. Not including China, Crimea, North Korea, or Syria. -
Culture of Binge Watching
Customers start discovering cable quality content on Netflix. If there was a series available on TV, the customer could catch up on the content on Netflix. This helped boost ratings for shows like Breaking Bad, where season 5 ratings were more than double those of Season 1. Netflix helped generate audiences for the many television series impacting what people watched on their personal time and making yet another impact on American culture. -
Netflix Original Content
Netflix devoted resources to produce high-quality content. They released political drama House of Cards, comedy-drama Orange is the New Black and The Crown. They also released a biographical series about Queen Elizabeth II and crime drama Ozark. Other original content such as science fiction horror series Stranger Things and the before mentioned teen drama 13 Reasons Why all were tremendous hits and received many Emmys and Golden Globes. -
Netflix on the Cloud: Pathbreaker in Tech Industry
Netflix experienced and issue that disrupts its ability to ship DVDs for three days. Thus, propelling the business logic of opting into the cloud. Migration would take place for nearly 2 years and finally complete in 2015. This and the complete shift of its billing infrastructure was a pathbreaker in tech industry. -
Netflix Faces Challenges
Challenges include fierce competition such as Disney and AT&T, They're creating their own content and did not offer licensing of it to Netflix. Also, Netflix's growth in domestic market shows declining. I am sure the company will be avid contenders in the world of streaming media. Their winning track record and award-winning shows, show strength and resilience for the company. They are also talking with more countries about licensing including the People's Republic of China. -
References
Jain, Siddhant. (2022, December 12). VdoCipher: The History of Netflix-Founding Model, Timeline, Milestones. https://www.vdocipher.com/blog/2017/06/netflix-revolution-part-1-history/#:~:text=Netflix%27s%20approach%20to%20starting%20its,all%20customers%20in%20June%202007. Rothaermel, Frank. (2021) Strategic Management, Fifth Edition. Pg 230, 232. https://prod.reader-ui.prod.mheducation.com/epub/sn_bd168/data-uuid-2bb6be22e3394be2a666d3cb200c40d1 -
References
Wikipedia. (2023) International expansion of Netflix. https://en.wikipedia.org/wiki/International_expansion_of_Netflix