In August of 1997 two men, Reed Hastings and Marc Randolph, started a simple, not all that revolutionary, company. Netflix, Inc. started as just another DVD rental business, but after 3 short years, it blossomed into what we know today. Netflix is a subscription-based streaming service with a large library of films and series, even producing some in-house.
What did they do right and what might the future hold? Will they remain successful as we enter the 2020s?
1999 – Netflix adds a new service to their business model. This is the dawn of unlimited viewing based on monthly subscription.
2000 – Netflix removes the option of a one-time rental and has about 300 000 monthly subscribers. There is a slight problem, however, carting those hardcopy DVDs back and forth is costing them too much. They offer to buy Blockbuster in order to use their shops as touchpoints with the clients, but the offer is refused.
2001 – Global events such as the markets hesitance towards the internet and 9/11 hit hard and Netflix is forced to lay off two-thirds of their staff.
2002 – This is the period of extreme growth that Netflix had been waiting for. DVD-players are finally available in every home.
2007 – DVD sales are falling rapidly, but Netflix is ready to take the leap. In February, alongside the rental of their billionth DVD, they launch the online streaming service we know today.
A Valuable Lesson:
What did Netflix do to achieve their success? They listened! People were no longer buying DVDs so they were brave and bold and they adapted quickly to become the service that would satisfy the needs of the market. They did not stick to the old, tired formula that had made them so much money before.
In 2007, after the success of a BILLION DVD rentals, it took some serious guts to change the game. And it has paid off. TV has taken a dip, with people opting for streaming services and they have even been able to produce their own content in-house with Netflix Original series.
An uncertain future:
Now that I understand the struggles, the courage it took for them to rise it is sad to think that they might soon fall.
Netflix is currently popular because it is a service for the people. It is something people are happy to pay for. Their shows are not interrupted by ads. They can find anything and everything they need on Netflix.
But the world is changing and Netflix may not be able to react fast enough this time. Many other companies, including Disney (who owns almost everything now) and HBO are considering developing their own streaming platforms. This will be the first time Netflix has any real competition. On top of that, the new ads they have begun running in between shows are earning them the contempt of many a binge-watcher.
Please, Netflix. You are a hero to so many procrastinators. We have watched you rise and we would hate to see you fall. Be bold and brave again. Give us innovation and user-friendliness. All we ask is that you do not become complacent in your success.