The genesis of Netflix is not a glamorous or inspiring story. In fact, one may argue it was formed out of desperation. In 1997, Reed Hastings was the CEO of Pure Atria and Marc Randolph served as the Vice President of Corporate Marketing (Kariuki, 2021). The story goes that the company was facing a looming merger that would put both of them out of work. While carpooling to the office, driving from Santa Cruz to Silicon Valley, the two of them began brainstorming ideas of what to get involved with next.
There were various ideas, but after hearing about a new piece of technology out of Japan, the DVD, things started to transpire. Realizing this technology would replace the VHS cassette, Hasting and Randolph founded Netflix, a service that for a monthly fee, would mail DVDs to a person’s home. The subscriber could keep the DVD movie for as long as they like without late fees or fines. The original concept of mailing movies to one’s home and not having any late fees was in direct contradiction with the competition, Blockbuster Video. At the time, Blockbuster was the largest video rental chain. By 1999, there were over 6,000 stores, and it was reported that 16% of their profit, or $800 million annually, came in the form of late fees (Zaman, 2022). Within the first year of business, Netflix had over 239,000 subscribers. In 2007, Netflix launched a video streaming service for its subscribers. In 2012, Netflix debuted Lilyhammer, its first original show, which laid the foundation for the binge-release model. The next year, some of their original content began winning Emmy awards (Clark & Gendron, 2023). By 2018, Netflix had its first feature-film Oscar winner Icarus. In September 2021, Netflix won more Emmys than any other network or streaming service. Two months later, Netflix launched the first video game around the world. (See The History of Netflix)
Netflix has changed our world more than once. In the beginning, Netflix made entertainment accessible to anyone who could receive mail. For those who could not leave their home or did not have access to a video store they could rely on Netflix for entertainment. Additionally, without late fees, one could hold onto the movie for a longer period of time. Throughout the history of the company, Netflix evolved. The downside to this was Blockbuster went out of business, and this put many people out of work. Ironically, in Netflix’s early stages, Blockbuster had an opportunity to purchase Netflix but declined. (The Story of Netflix) The second area in which Netflix has changed communication is via the streaming service. Through streaming, movies can now go straight to the home. This was an excellent option for many, especially during the pandemic. A family or group of friends does not need to go to the theater to watch a movie. The downside is the local movie theater took a hit. Netflix also played a large role in binge-watching. As much as we enjoy watching a show one episode after another and not needing to watch a show over the course of months, binge-watching also has negative effects as well. Watching too much television can cause depression, mood disturbances and behavior changes, insomnia, and loneliness (Clay, 2017).
The idea for Netflix started during a car ride to work. Initially, it was an answer to the giant video store Blockbuster. Never did the founders imagine how their company would change communication and entertainment.
References
Clark, T. & Gendron, W. (2023). Netflix is ending its DVD-rental service after 25 years. Business Insider, 18 April 2023. https://www.businessinsider.com/netflix-history-streaming-growth-story-hollywood-disruption-subscribers-2022-6
Clay, J. (2017). Is Netflix bad for you? How binge-watching could hurt your health. USC News. https://news.usc.edu/131981/is-netflix-bad-for-you-how-binge-watching-could-hurt-your-health-amazon-hulu-tv/#:~:text=A%20study%20published%20in%20the,hours%20and%208%20minutes%20daily.
Kariuki, P. (2021). How and When Did Netflix Start? A Brief History of the Company. Make Use Of.
Zaman, R. (2022).Netflix Disruptive Innovation-renting to streaming. https://www.the-waves.org/2022/03/15/netflix-disruptive-innovation-renting-to-streaming/
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