Netflix


Netflix, Inc. is an American media-services provider headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company's primary business is its subscription-based streaming OTT service which offers online streaming of a library of films and television programs, including those produced in-house. As of January 2019, Netflix had over 139 million paid subscriptions worldwide, including 58.49 million in the United States, and over 148 million subscriptions total including free trials. It is available almost worldwide except in mainland China, Syria, North Korea, Iran, and Crimea. The company also has offices in the Netherlands, Brazil, India, Japan, and South Korea. Netflix is a member of the Motion Picture Association of America (MPAA).  

Hastings invested $2.5 million in startup cash for Netflix. Randolph admired the fledgling e-commerce company Amazon and wanted to find a large category of portable items to sell over the Internet using a similar model. They considered and rejected VHS tapes as too expensive to stock and too delicate to ship. When they heard about DVDs, which were first introduced in the United States on March 31, 1997, they tested the concept of selling or renting DVDs by mail, by mailing a compact disc to Hastings' house in Santa Cruz. When the disc arrived intact, they decided to take on the $16 billion home video sales and rental industry. Hastings is often quoted saying that he decided to start Netflix after being fined $40 at a Blockbuster store for being late to return a copy of Apollo 13. But this is an apocryphal story that he and Randolph designed to explain the company's business model and motivation.  

In 2000, when Netflix had just about 300,000 subscribers and relied on the U.S. Postal Service for the delivery of their DVDs, they were losing money and offered to be acquired by Blockbuster for $50 million. They proposed that Netflix, which would be renamed as Blockbuster.com, would handle the online business, while Blockbuster would take care of the DVDs, making them less dependent on the U.S. Postal Service. The offer was declined.  

Another contributing factor for the company's online DVD rental success was that they could offer a much larger selection of movie titles to choose from than Blockbuster's rental outlets. But when they started to offer streaming content for free to its subscribers in 2007, it could offer no more than about 1000 movies and TV-shows, just 1% compared to its more than 100,000 different DVD titles. Yet as the popularity kept growing, the number of titles available for streaming was increasing as well, and had reached 12,000 movies and shows in June 2009. One of the key things about Netflix was that it had a recommendation system known as cinematch, which not only got viewers to remain attached to the service, by creating a switching cost, but it also brought out those movies which were underrated so that customers could view those movies too from their recommendations. This was an attribute that not only benefited Netflix, but also benefited its viewers and those studios which were minor compared to others.  

In April 2014, Netflix approached 50 million global subscribers with a 32.3% video streaming market share in the United States. Netflix operated in 41 countries around the world. In June 2014, Netflix unveiled a global rebranding: a new logo, which uses a modern typeface with the drop shadowing removed, and a new website UI. The change was controversial; some liked the new minimalist design, whereas others felt more comfortable with the old interface. In July 2014, Netflix surpassed 50 million global subscribers, with 36 million of them being in the United States.  

Netflix service plans are currently divided into three price tiers; the lowest offers standard definition streaming on a single device, the second allows high definition streaming on two devices simultaneously, and the "Platinum" tier allows simultaneous streaming on up to four devices, and 4K streaming on supported devices and Internet connections. The HD subscription plan historically cost US$7.99; in April 2014, Netflix announced that it would raise the price of this plan to $9.99 for new subscribers, but that existing customers would be grandfathered under this older price until May 2016, after which they could downgrade to the SD-only tier at the same price, or pay the higher fee for continued high definition access.  

Netflix revealed a prototype of the new device called "The Switch" at the 2015 World Maker Faire New York. "The Switch" allows Netflix users to turn off lights when connected to a smart home light system. It also connects to users' local networks to enable their servers to order takeout, and silence one's phone at the press of a button. Though the device hasn't been patented, Netflix released instructions on their website, on how to build it at home (DIY). The instructions cover both the electrical structure and the programming processes.  

Other distributors who have licensed content to Netflix include Warner Bros., Universal Pictures, Sony Pictures Entertainment, 20th Century Fox, and The Walt Disney Studios. Netflix also holds current and back-catalog rights to television programs distributed by Disney–ABC Television Group, DreamWorks Classics, Kino International, Warner Bros. Television, 20th Television and CBS Television Distribution, along with titles from other companies such as Hasbro Studios, Saban Brands, Funimation, and Viz Media. Formerly, the streaming service also held rights to select television programs distributed by NBCUniversal Television Distribution, Sony Pictures Television and 20th Century Fox Television. Netflix also previously held the rights to select titles from vintage re-distributor The Criterion Collection, but these titles were pulled from Netflix and added to Hulu's library.