On August 29, 1997, Reed Hastings and March Randolph They received a package from the post office, in it… a DVD. They sent it themselves to check if it was damaged during shipping. Test came back positive, so same day Founded the Netflix company. Today turns 25, and you can see the commemoration video at the beginning of the news.
in their origins The streaming giant was very different from what it is now. In 1997, movies at home were watched on VHS, and TV series on TV. A few that they broadcast on the few channels that exist. But in the same year The first DVD, the movie Twister, has been released. A new digital format that is much more compact and durable that can be mailed.
Movies are rented in video stores for 24 or 48 hours., but if you did not return it within these times, you were fined heavily. It was a frustrating process because sometimes you had to go to the remote video store to watch the movie and sometimes return to the video store to return it in terms that didn’t suit you.
Frustrated by the fine for not returning the blockbuster Apollo XIII, Reed Hastings and March Randolph came up with an idea: Create a website to rent and mail DVD movies. No deadlines or travel. Customers can return their possessions at any time, provided they do not make another lease until they return it.
This is how Netflix.com was born, in 1998It quickly became a frustrating competition for the thousands of brick-and-mortar video stores owned by Blockbuster and other chains. In 2019, it had shipped 5 billion DVDs to its customers, and there are still millions of DVD subscribers in the United States.
Over the years, the DVD rental business has become unsustainable due to the hundreds of thousands being mailed every day.
But then another phenomenon emerged that Netflix decided to take advantage of: Internet and video streaming. Instead of sending discs… why not make people watch movies on their computers, cell phones or TVs?
Netflix launched its streaming business in 2007and, as Elena Neira perfectly explains in the Business Insider newsletter, her greatest value was this: the filmmakers and the competition laughed at it.
20 years ago everything on the internet was piratedand no one thought that Netflix could make money from streaming. He lived an uncompetitive decade where it can integrate any movie or series from any distributor on its platform that continues with its film, television and DVD business.
10 years until Netflix Grow big, gain a big competitive advantage and earn lots of money. the money you use They make their own TV shows and movies. All of a sudden, specials more popular than classic series like House of Cards or Narcos, or Oscar-winning movies like Roma appeared on the internet…
25 years, the moment of reinvention
The competition is starting to understand that Netflix discovered a new type of market based on cheap fees, ad-free, an incentive for sharing accounts to have a large number of users, and simultaneous worldwide premieres of all seasons made serial marathons into fashion.
slowly Disney, HBO, Apple, Amazon, Paramount, and others begin copying their business models. It took years to cut the advantage, until we planted it ourselves in 2022, the year 2022. Netflix 25th AnniversaryIt is also the year of the crossroads.
After losing over a million subscribers for the first time in its history, saturated market Due to intense competition and fatigue of many subscribers (so much content for so little free time), Netflix needs to reinvent itself.
On its 25th anniversary, gave up on the values that made him popularGoodbye to cheap fares, goodbye to account sharing, and open doors to the advent of advertising.
220 million users, 11,300 employees in 197 countries and investing 17,000 million dollars a year in TV series and film production, shares are down 60% so far this year. Netflix knows that streaming movies and series is no longer enough to be profitable, so it is exploring other areas such as video games.
Like Apple did with cell phones, or Ford did with cars in their time, Netflix revolutionized the cinema and home video market. Now he’s fighting not to be swallowed by his own success.
Source: Computer Hoy
