Netflix: From a small startup to a global entertainment superpower
Do you remember the time when you used to search the shelves at the Video Store for renting the right DVD for watching throughout the weekend? You would likely walk in with the latest releases in mind, but they would have already been picked up. Eventually, you would leave with two or three DVDs other than those you had the desire to watch and microwave popcorn picked up from the market near your house. This may sound archaic now, but most people did not even have DVD players 20 years ago. Let’s start from the beginning and see how Netflix has changed the way we consume movies and what has been its key to success.
Scale up - The Journey
1997-The idea:Once upon a time, as the story goes, Hastings incurred a $40 fine when he lost a copy of “Apollo 13” he had rented from a Blockbuster video store. That was the moment that Hastings realized there was a market for renting DVDs via mail with no late fees. As a result, Netflix was founded in Scotts Valley, California by Marc Randolph and Reed Hastings.
1998-Netflix.com: Instead of physically going to the video store, you could browse the virtual aisles on Netflix, rent a movie for a few bucks a piece and within two to three business days a red envelope with a DVD would arrive in your mailbox. After seven days, return it via the mail in the same packaging.
1999- Monthly subscription model: Netflix introduced its monthly subscription model. From there, it built its business around flat-fee unlimited rentals with no due dates, late fees or shipping costs.
2000: Netflix offered itself up for acquisition to competitor Blockbuster for $50 million. The video rental store declined the deal.
2007-On demand streaming video: Netflix delivers its billionth DVD and begins to move away from its original core business model of mailing DVDs by introducing video on demand via the Internet. The project of implementing a streaming service was completed by 2007. That innovation has change, for good, the future of the TV, the domestic entertainment and generally the movie industry.
2010-The end of the video-rental era: Blockbuster, the biggest video rental company in the USA declared Bankruptcy, due to the success of Netflix.
2013-Netflix Original: Netflix began creating its own original content starting with House of Cards which debuted the same year. Stranger Things, Orange Is The New Black, Black Mirror, Narcos, are just some of the other successful Netflix Originals since. After this revolutionary development, the movie business has never been the same because Netflix has broken the traditional. It provides all episodes at the same time and as a result the immediate satisfaction of the subscribers. Since releasing the traditional structure of how people used to watch TV series and movies, the subscriber acquires his own viewing identity. The individual can determine the way, the place and the time that will consume the product without depending on the TV channels program.
2010–2019 Going Global: Netflix starts expanding its streaming service to the international market, starting with Canada continuing with Latin America and the Caribbean. Τhe list of countries as of today’s records has been growing constantly reaching to one hundred and ninety (190). This is a remarkable achievement for a company that was only based in the U.S. before 2010, and expanded to fifty (50) other countries by 2015.
Why and how did Netflix turn into one of the biggest media and entertainment company within twenty years against companies as old as a century?
Netflix’s rivals are now media mammoths like Disney, Time Warner, and Twentieth Century Fox that have been around a lot longer than it has. But Netflix with 137,1 million members is growing much faster.
The ability to look forward into the future of the entertainment industry played a pivotal role in the growth of the streaming service. Netflix could have just retired as a DVD rental company, but it is no secret that at the peak of its DVD rental service growth, Netflix recognized and implemented proper plans for its future. Being stuck in the past is a common reason for prominent companies slowly fading away.
Netflix also completed several deals with known production houses for hosting their content. After gaining a solid subscriber base, Netflix decided to open its own production house, striking up a deal with the most profitable superhero film production house, Marvel — producing several brilliant TV shows under its banner.
Lessons in Enterpreneurship
Without any doubt, Netflix is a successful startup; a company with a brilliant concept that is bound to be successful in a market full of competitors. Recognizing a changing business landscape for its industry is something Netflix definitely got right as evidenced in its evolution thus far. The next big step was implementing Netflix Originals. Netflix understood that copyright and distribution issues made their content unavailable in some regions and there was no way around it. As a result, Netflix started producing its own content and currently it has been expanded into a multi-billion dollar segment.
According to Marc Randolph, Netflix co-founder, the following are some things that this successful platform can teach us about innovation:
- Disrupt yourself
2. There are no bad ideas.
3. Confidence is the key
4. Try your ideas: nobody knows anything
In conclusion, the key and wise words that characterize Netflix’s evolution are innovation, optimism and persistence. Therefore, whoever wants to be successful in the business world, should take them under consideration.
