The Golden Age of Streaming
From store-front rentals to online streaming, Netflix has been an innovator and game changer in the entertainment industry making the convenience, affordability, and enjoyment of home entertainment a pop culture phenomenon.
Imagine it is a weekend evening and you are lounging at home when you decide you want to do something more than just sit around. Perhaps you are feeling lazy and don’t want to leave the comforts of your bed, yet you are in the mood for great entertainment.
Whatever your motivation or desire, thanks to Netflix, now you have a multitude of options that only require your spontaneity. You grab your computer, browse through a selection of options, and within minutes from anywhere and at anytime, you are streaming.
Accessing home entertainment and viewing first-rate programming from one’s television or monitor, has not always been this simple.
Reed Hastings, the creator of Netflix, changed all that. He pioneered and invented a user-friendly interface that would change the video rental industry forever.
Along with those industry changes came changes to people’s viewing practices. An entirely new category of leisure behavior evolved: the ability to enjoy the kind of high quality programming once only found at a movie theater, the ability to engage in marathon viewing of multiple episodes, and the ability to do so anytime of day or night by pausing and resuming watching with the simple click of a remote.
Netflix’s dynamic history evolved over the past two decades as they retired an older model of getting their product into a consumer’s hands — a mail order rental business — and progressed to online streaming, providing video recommendations on a personalized basis for users, and going global.
Today, Netflix is considered the world’s leading internet television network and a visionary success.
A Look Back; How Netflix Got Its Start and Overcame Challenges
Netflix began in 1997 when Reed Hastings, the CEO of Netflix, created an innovative concept and service the video rental industry had been sorely lacking: a way to rent programming content via the internet.
Prior to their launching their online streaming services, Netflix distributed videos via the mail with a subscription service. This mail order service would become a solution to millions of people’s movie rental pain points because they could avoided the dreaded drive to a video store.
Even then, Netflix was an innovator. They were the first company to offer movie rentals by mail, with a monthly flat-fee unlimited rental subscription and a methodology of providing video recommendations on a personalized basis for users.
Prior to this, Blockbuster was the main video rental service. The process of renting a movie from Blockbuster was not exhausting. Customers had to drive to a store front and navigate through hundreds of bulky video tapes, lined along numerous rows of shelves. Customers also had to return the movie by a due date. Failure to do so resulted in a late fee charge.
One day, Hasting received a phone call informing him that he had been charged a late fee for not returning his rental by the due date. It was at this moment that he decided he did not want to deal with these burdens anymore, so he created an alternative method to renting videos.
In doing this, he bankrupted and helped destroy Blockbuster.
“It was a battle between old technology and new technology, and it looks like new technology won out in the end”.
Netflix’s innovative technology that outsmarted Blockbuster’s outdated technology included: creating a convenient way of renting videos via the mail and eliminating a late return fee. Netflix also improved their technology by moving away from the bulky videotape and used a thin disc with higher resolution instead.
Customers jokingly reminisce about using old bulky video tapes.
“the first time we laid eyes upon your shiny, thin, donut-shape and compared you to the ugly bulk of a video tape was a revelation”.
Expanding to Online Streaming
It was in 2007 that Netflix took its next big step and expanded their service to streaming videos through the Internet. Within several years, streaming customers now exceed mail customers. Hastings points out
“we are Internet TV; and that sector has grown from very small 15 years ago to starting to be significant now.”
Netflix continues to take the lead in online streaming to this day. A recent study by Strategy Analytics Consumer Metrics showed that more people are likely to stream videos through Netflix than through similar services like Amazon Prime.
Netflix Sweeps the Globe
Netflix has gone global and grown into something larger than Hastings ever imagined. Netflix can now be streamed in over 190 countries.
Hastings reflects on the beginning years of Netflix.
“back in 2001…We were not yet profitable. We were growing on DVD and wondering how things would work”.
Fast forward 15 years, and their influence on the global economy continues to grow rapidly. They are strengthening ties with cable and cellphone providers around the world, which gives the business “almost instantaneous access to potential new users without having to spend a fortune on advertising” says Hasting. Hasting explains,
“the big focus is taking the simple proposition around the world”.
And that is just what he did.
Reed Hastings: MVP of the Entertainment Industry
Reed Hastings has revolutionized the industry of video rental. Netflix’s original plan to create a service offering video rentals by mail, with a monthly flat-fee unlimited rental subscription has had a booming success. Now Netflix continues to grow globally.
With the luxury of Netflix, spontaneous decisions like watching the movie can be done from the comfort of one’s own bed.