Netflix:
Netflix, Inc. is an American production business and subscription-based over-the-top streaming service with headquarters in Los Gatos, California. It was established in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, and provides a library of movies and TV shows via distribution agreements in addition to its own works, dubbed Netflix Originals.
222 million people were Netflix members as of September 2022, with 73.3 million of those people living in the United States and Canada, 73.0 million in Europe, the Middle East, and Africa, 39.6 million in Latin America, and 34.8 million in the Asia-Pacific area.
Except for Mainland China, Syria, North Korea, and Russia, it is accessible everywhere. In addition to being a member of the Motion Picture Association, Netflix has been a major player in the distribution of independent movies.
The list of Netflix-compatible devices includes smart TVs, set-top boxes connected to televisions, tablet computers, smartphones, digital media players, Blu-ray players, video game consoles, and virtual reality headsets. Netflix can be accessed via web browsers or application software installed on these devices.
It may be found in 4K resolution. The business offered DVD and Blu-ray rental services in the US, with each disc being sent out separately by USPS from local warehouses.
Netflix originally offered both DVD sales and mail-order DVD rentals, but after a year the sales were stopped to concentrate on the DVD rental business.
Video-on-demand and streaming media were offered by Netflix in 2007. In 2010, the business extended to Canada, then to Latin America and the Caribbean. In 2013, Netflix made its debut with the premiere of its first television series, House of Cards. It added another 130 nations in January 2016 and thereafter had operations in 190 nations.
On the Fortune 500, the firm is placed 115th, while it is ranked 219th on the Forbes Global 2000.
As of February 2022, it has the second-largest market capitalization of any entertainment or media corporation. According to Morning Consult, Netflix was the eighth-most trusted brand in the world in 2021. With a total return of 3,693% in the 2010s, Netflix was the best-performing company in the S&P 500 stock market index.
Hastings and Ted Sarandos, Netflix's two CEOs, share their time between Los Gatos and Los Angeles. Netflix is based in Los Gatos, California, in Santa Clara County.
Additionally, it runs outposts in Canada, France, Brazil, the Netherlands, Italy, Japan, Poland, South Korea, and the United Kingdom in addition to Asia, Europe, and Latin America. Production centers for the business are located in Los Angeles, Albuquerque, London, Madrid, Vancouver, and Toronto. In contrast to traditional distributors, Netflix pays more upfront for TV series but retains more of the "upside" (i.e. potential future income prospects from prospective syndication, merchandising, etc.) on popular shows.
History:
Marc Randolph and Reed Hastings established Netflix on August 29, 1997, in Scotts Valley, California. Hastings, a mathematician and computer scientist, co-founded Pure Atria, which Rational Software Corporation purchased for $750 million that year, at the time the largest transaction in Silicon Valley history. Randolph had worked for Pure Atria as a marketing director after that firm was bought by Pure Atria. Before that, he co-founded the computer mail-order business MicroWarehouse and served as vice president of marketing for Borland International. While riding in a car together from their homes in Santa Cruz, California, to Pure Atria's headquarters in Sunnyvale, Hastings and Randolph had the concept for Netflix. The carpool group included Patty McCord, who would eventually serve as Netflix's chief of human resources. Randolph liked Amazon.com and sought for a sizable market of transportable goods to sell online using the same business strategy. VHS tapes were considered for sale and rental but were rejected because they were too costly to stock and too fragile to transport. They explored the idea of renting or selling DVDs by mail by sending a compact disc to Hastings' home in Santa Cruz when they first learned about DVDs, which were initially released in the US in early 1997. They made the decision to join the $16 billion home-video sales and rental market after the disc was received undamaged. Hastings is often cited as stating that he founded Netflix as a result of receiving a $40 fee from a Blockbuster location for returning a DVD of Apollo 13 late, a statement that Randolph has subsequently refuted. Hastings used the proceeds from the sale of Pure Atria to invest $2.5 million in Netflix. With 30 staff and 925 titles—nearly all DVDs released—Netflix began as the first DVD rental and sales website. When Jeff Bezos and Randolph met, Amazon proposed to buy Netflix for between $14 and $16 million. The offer was first considered reasonable by Randolph, who feared Amazon's competitiveness, but Hastings, who controlled 70% of the business, rejected it on the flight home.
In the beginning, Netflix provided a per-DVD rental model, but in September 1999 it introduced the idea of a monthly membership.
The firm was able to concentrate on its business strategy of flat-fee unlimited rentals without due dates, late penalties, shipping and handling costs, or per-title rental fees after abandoning the per-rental model in the early 2000s. When Netflix started experiencing losses in September 2000, amid the dot-com bubble, Hastings and Randolph proposed selling the business to Blockbuster LLC for $50 million. The CEO of Blockbuster, John Antioco, dismissed the proposal as a joke and said that "the dot-com panic is grossly overdone." Despite having seen rapid development at the beginning of 2001, Netflix was forced to delay its initial public offering (IPO) preparations and fire one-third of its 120 workers due to the ongoing repercussions of the dot-com bubble collapse and the September 11 attacks.
opened the Netflix rental package to see a copy of Coach Carter on DVD (2005)
Late in 2001, DVD players were a common Christmas present, and chief talent officer Patty McCord saw that demand for DVD subscription services was "increasing like crazy." On May 29, 2002, the business went public by issuing 5.5 million shares of common stock for US$15.00 each. The U.S. Patent & Trademark Office granted Netflix a patent in 2003 that covered its subscription rental business as well as many renewals. In 2003, Netflix reported its first profit of $6.5 million on $272 million in sales; by 2004, the profit had risen to $49 million on over $500 million in sales. 35,000 distinct movies were accessible in 2005, and 1 million DVDs were distributed daily by Netflix.
Blockbuster launched a DVD rental service in 2004 that enabled customers to return discs to physical shops in addition to borrowing them from online sources. Blockbuster's service had two million subscribers by 2006, lagging Netflix in terms of subscribers but taking money away from Netflix. In 2007, Netflix reduced its prices. Although it was a common misconception that Netflix finally "killed" Blockbuster in the DVD rental business, the firm suffered from bankruptcy and internal strife.
In a complaint for patent infringement filed on April 4, 2006, Netflix claimed that two of its patents were infringed by Blockbuster LLC's online DVD rental membership service and wanted a jury trial in the Northern District of California. The first claim claimed that Blockbuster had violated the law by copying the "dynamic queue" of DVDs that were made available to each customer, using Netflix's method of sending DVDs to subscribers based on their ranked preferences in the queue, and allowing Netflix to update and rearrange the queue. The second legal claim accused of violation of both Netflix's communication and distribution strategies as well as the membership rental business. On June 25, 2007, the corporations reached a settlement; the specifics weren't made public.
On October 1, 2006, Netflix announced the Netflix Prize: $1,000,000 would go to the first person to create a video recommendation algorithm that outperformed Cinematch by more than 10% in predicting customer ratings. The winning team, "BellKor's Pragmatic Chaos," received the $1,000,000 prize on September 21, 2009. Since its release in 2000, Cinematch has been recommending movies to its customers, many of which they may not have previously heard of.
Netflix licensed and released indie films including Born into Brothels and Sherrybaby via its subsidiary Red Envelope Entertainment. Red Envelope Entertainment ventured into the creation of original content with directors like John Waters in late 2006. Red Envelope Entertainment was shut down by Netflix in 2008.
Making the switch to streaming services (2007–2012)
The business debuted a streaming media service in January 2007 that introduced video on demand over the Internet. However, it only had 1,000 films accessible at that time for streaming, compared to 70,000 DVDs. The business had long explored streaming movies, but it wasn't until the middle of the 2000s that data rates and bandwidth prices had decreased enough for users to be able to do so. A "Netflix box" that could download movies overnight and have them available for viewing the following day was the initial concept. In 2005, Netflix created the box and service, purchased the movie rights, and launched. But the idea of employing a hardware device was dropped and replaced with a streaming notion after seeing how successful streaming services like YouTube were despite the dearth of high-definition material.
A copy of Babel, which was the billionth DVD delivered by Netflix, was sent to a Texas customer in February 2007. To create a "Netflix Player" that would enable streaming content to be played directly on a television set rather than a computer or laptop, Netflix hired Anthony Wood, one of the original DVR industry pioneers, in April 2007. Even though the player was initially created by Netflix, Reed Hastings ultimately ended the project to help persuade other hardware manufacturers to integrate Netflix support into their products.
All rental-disc subscribers acquired access to unlimited streaming beginning in January 2008 with no additional fees. Due to the launch of Hulu and Apple's new video-rental services, this change was made. Page not found Due to a corrupted database in August 2008, which prevented the company from sending DVDs to customers for three days, Netflix decided to move all of its data to the Amazon Web Services cloud. In November 2008, Netflix stopped selling used DVDs and started providing Blu-ray rentals to customers. In 2009, DVD shipments were surpassed by Netflix streams.
To encourage studios to sell physical copies, Netflix and Warner Bros. agreed to delay new release rentals on January 6 by 28 days, and Universal Pictures and 20th Century Fox reached a similar agreement on April 9. A contract for Netflix to stream Relativity Media films was signed in July 2010. A five-year, nearly $1 billion deal between Netflix and Paramount, Lionsgate, and Metro-Goldwyn-Mayer was reached in August 2010. The agreement raised Netflix's annual spending caps by about $200 million. It increased its streaming spending from $31 million in 2009 to $117 million in the first half of 2010. The firm started providing streaming services to the international market in Canada on September 22, 2010. Netflix started providing a solo streaming service in November 2010 in addition to DVD rentals.
After the third season of the Sony Pictures Television production, Breaking Bad's rights were bought by Netflix in 2010, when the original broadcaster AMC had hinted that the program would be canceled. Sony pushed Netflix to release Breaking Bad in time for the fourth season, which led to new fans binge-watching the Netflix back episodes and more than tripling the show's popularity on AMC by the time of the fifth season. The first television program to be thought to have this "Netflix effect" was Breaking Bad.
A Netflix button was added to several remote controllers in January 2011 by Netflix, enabling customers to quickly access Netflix on compatible devices. With 30% of traffic during peak hours, Netflix's streaming service became the main source of Internet streaming traffic in North America in May 2011. On July 12, 2011, Netflix made the announcement that it will split its current membership plans into two distinct ones, one covering streaming services and the other supporting DVD rentals. While DVD rentals would begin at the same price as streaming, they would cost $7.99 per month. DreamWorks Animation and Netflix announced a content partnership in September 2011. 43 new countries in Latin America were added to Netflix in September 2011. Netflix separated DVD rental and streaming services on September 18, 2011, when it announced plans to rename and reorganize its DVD home media rental business as a stand-alone company named Qwikster. On October 10, 2011, Netflix said that it will continue to operate as Netflix and would continue to market both its streaming and DVD-rental services as Netflix.
The United Kingdom and Ireland were the first two countries in Europe where Netflix debuted on January 4, 2012.] Netflix and The Weinstein Company agreed to a license agreement in February 2012. Netflix purchased the domain name DVD.com in March 2012. Netflix changed the name of its DVD-by-mail business to DVD.com, A Netflix Company in 2016. Netflix registered FLIXPAC, a political action committee (PAC), with the Federal Election Commission (FEC) in April 2012. Joris Evers, a representative for Netflix, said on Twitter that the company wanted to "engage on topics like net neutrality, bandwidth restrictions, UBB, and VPPA." Open Road Films and Netflix agreed to a contract in June 2012.
The Weinstein Company and Netflix agreed to a multi-year output agreement for RADiUS-TWC movies on August 23, 2012. Epix and Netflix agreed to a five-year streaming agreement in September 2012. First-run and back-catalog Epix material were only available to Netflix for the first two years of this contract. 90 days following their Epix premieres, Epix films became available on Netflix. These featured movies from Lionsgate, Paramount, and Metro-Goldwyn-Mayer.
Netflix began streaming in Denmark, Finland, Norway, and Sweden on October 18, 2012.
Disney and Netflix announced an exclusive multi-year agreement on December 4, 2012, for first-run United States subscription television rights to animated and live-action films from the Walt Disney Studios. Classics like Dumbo, Alice in Wonderland, and Pocahontas are now available on Netflix, and other titles will follow in 2016. In 2013, direct-to-video releases became accessible. Due to the introduction of Disney+ in 2019, the arrangement with Disney came to an end. Following Disney's repurchase of the rights to those programs, Netflix was still able to continue broadcasting the Marvel shows that were created for the service until March 1, 2022.
Netflix and Time Warner's Turner Broadcasting System and Warner Bros. Television inked a deal on January 14th, 2013 to start distributing material from Cartoon Network, Warner Bros. Animation, and Adult Swim as well as TNT's Dallas in March 2013. Shortly after agreements with Viacom to broadcast Nickelodeon and Nick Jr. programming expired, Netflix acquired the rights to these shows.
