Have you remembered what used to happen in the 1990s?
We used to get cassettes for rent. Now, the whole pleasure of watching a movie was on one side, and the urgency of returning that cassette on time was on another side, to avoid a late fee of any sort.
I got this big late fee, for $40 and I didn’t want to tell my wife about it. I was just too embarrassed. It was like that was the defining moment for Netflix and a light bulb went off in my head.– Reed Hastings.
It was way back in 1997 when Reed Hastings and Marc Randolph came up with the idea of Netflix.
Netflix is a combination of Net (which is an abbreviation of the internet) and flix (a common abbreviation for a movie or film).
As I mentioned above, Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. After almost 24 years in 2021, They had 208 million subscribers, including 74 million in the United States and Canada.
It is available worldwide except in mainland China, Syria, North Korea. The company has offices in Canada, France, Brazil, the Netherland, India, Japan, South Korea, and the United Kingdom.
Let’s take a look at the history and journey of Netflix
In 1997, Reed Hastings and software executive Marc Randolph co-found Netflix, to offer online movie rentals.
In 1998, they launched the first DVD rental and sales site, netflix.com. The year 1999 brought a new Subscription service started by Netflix and offering unlimited DVD rentals for low monthly prices.
In 2002, Netflix goes on public, and with membership in the count at 60,000 in the USA, makes its initial public offering. The company also ends the year with around 857,000 subscribers.
In 2003, the founder Marc Randolph steps down as a member of the Board and leaves Netflix. This year Netflix hits a record for the number of subscribers with more than 1 million.
In 2004, subscribers reached 2 million but this year was a little odd for the company because the company was sued for false advertising about a claim of unlimited rentals with one-day delivery. Whereas, Netflix denied any wrongdoing and both parties eventually agreed on a settlement.
By the year 2005, the number of their subscribers rose to 4.2 million and it reached 5 million in 2006.
The Era of Revolution Begins
Netflix in 2007 introduced video streaming called “watch now”. This allowed subscribers to instantly watch television shows and movies on their personal computers. That was a huge shift in the company’s business model.
I think we all are aware of what happened in 2008. It was a “Global Financial Crisis” that was considered to be the worst financial disaster since the great depression of the 1930s.
However, 2008 was not too bad for Netflix because in that year they partner with consumer electronics companies to allow streaming on the blue-ray disc players, and TV set-top boxes. This year-end with around 9.4 million subscribers and it rose to 12 million in 2009.
One thing which company observes in 2010 was, the customer opted for streaming subscribers were higher as compared to DVD rental customers. In 2010 they launched its streaming services in Canada and it was now available on Apple devices.
It was 2011 when Amazon Instant video launched which made 5000 movies and TV shows available for Amazon Prime members in a move to directly compete with Netflix.
Expansion to more regions
Coming to 2012, Netflix becomes available, in Europe including the UK, Ireland, and Nordic countries. It also won its first Primetime Emmy Engineering Award. With that, it also hits 25 million subscribers and reached 40 million subscribers by 2013.
In 2014, Netflix launched 6 new countries in Europe (Austria, Belgium, France, Germany, and Switzerland) and won 7 creative Emmy Awards.
Netflix in 2016, expands to 130 countries offering movies and TV shows in a staggering 21 languages.
In 2017, subscriber numbers reach an astonishing 100 million globally. They also won their first Academy Award for the best documentary short subject for “The White Helmets”.
Things started getting better for Netflix and in 2019 Nexflix wins four Academy Awards for best director, best foreign-language film, and best cinematography for Roma.
About 2020, we all know was a bumper year for OTT platforms and the reason was Lockdown and folks were confined to their homes, and every other business was kept at a halt and this was the time when subscribers of Netflix grew to over 180 million.
Future of Netflix
Many experts believe that the future could be less rosy for Netflix. This is mostly because of the explosion in other streaming services launched to challenge Netflix’s seeming dominance. According to Forbes in 2018 Netflix spent $12 billion building its library of original films and series, an 88% uptick from 2017.
Don’t invest by seeing a history only there are many other things which need to be checked as well. Many people have a perception that content on Netflix is amazing that’s why the stock will be also good.
These two are very different things, content can be very good but technicals can be questionable, Fundamentals can be average and there could be few more parameters that need to be checked well before investing.