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The History of Netflix

Posted by: on Mar 15, 2015 | No Comments

Netflix is the largest online movie rental facility, with approximately 57,400,000 users worldwide and a wide range of approximately 100,000 titles. Netflix is best known for its expansive range, ease of choosing titles, and fast and free delivery.  The 1.1 million subscribers of the company are charged $19.95 per month for unlimited titles, and are typically lent out no more than three disks at one go. The 15,000 titles owned by the company make up the 5 million disks inventories of the company, ready to be immediately lent out on demand. Netflix boats more than 20 regional shipping centers all around the United States, resulting in quick delivery of the orders. Most users receive their disks within a day or two of ordering.


Netflix was founded by Reed Hastings and Marc Randolph, in 1997, with the idea to rent and sell DVDs over the Internet. The DVDS format had been recently introduced at that time and an entire movie could be saved on a five inch disk, in high quality. Only around a thousand titles were available on DVD at that time, and the hardware that was required to play the DVD was fairly expensive to be afforded by the average Americans. However, Reed and Marc were sure that the DVD had enough potential to replace the low-resolution video tapes and hence they invested in this area.

The company had a good advantage of the smaller sized light weight disks, since they could be cheaply shipped to users. Netflix reserves 1000 copies of new releases of movie titles that are handed over to the company the day they are made available in stores.  Netflix started the business in April of 1998, with just 30 working employees and 925 titles available to be rented out or sold. The DVDs could be rented for seven days for $4, and a shipping cost of $2 was charged, which reduced if additional titles were rented. Additional fee had to be paid if the disks needed to be kept for more than seven days. The response to Netflix’s initial services was very strong and the user base continued to grow. The share prices also went up with the introduction of online service provider.  To date, Netflix is the most used online movie provider. Netflix possesses more than 57.4 million subscribers and a stock price of over $400 per share; and both have increased ten times in the last ten years. Netflix has ventured in streaming video content to several devices to it’s growing user base that binge watch new content. We plan to do a more detail coverage of Netflix growing exclusive content and new features in the near future.

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