The Rise of On-Demand TV Programming: NETFLIX

What is Netflix?

Can you imagine a world before we were able to stream any TV show, game, or movie easily on a subscription internet-based platform? Before steaming, people had to drive to stores like Blockbuster to rent DVDs to bring home to watch. When they were done, they’d then have to bring it back to the store. If they were late, they’d have to pay extra late fees! One of the biggest complaints about Blockbuster was that they mostly carried new releases, and only a few copies each so it was very hard to find older movies and TV shows. Netflix was invented to solve these challenges. After researching the company, I learned that the founders thought of Netflix when Reed Hastings was charged a late fee for a movie rental. The founders wanted to create an idea where customers could subscribe to rent a DVD by mail. After they turned this idea into a successful company, the founders started the idea of streaming and now has millions of subscribers. 

Netflix History 

Netflix was founded in 1998 by Reed Hastings and Marc Randolph (HPU's very own Innovator in Residence) because they saw a need to make borrowing movies easier and to give people more options. The first version of the company Hastings and Rudolph first rolled out was their DVD-by-Mail service. They created a website that customers could go to and choose movies from, and the DVD was mailed right to your house. After you were finished watching the movie, you would put the DVD back into an envelope that Netflix provided and ship it back. Their library was huge and included old movies as well as TV shows. Customers loved how easy it was to use, and that they were not being charged late fees. By 2000, (their 4th year) the company made $41,237,464 in revenue and had grown 607 percent from 1999. Their subscriber base grew again in 2000 when they started a personalized recommendation system that used an algorithm based on your prior selections. Then later in 2007, they started streaming which allowed subscribers to access content directly over the internet. Everyone loved this a lot better, and more people started to subscribe. As more customers added a streaming-only subscription, the DVD business got smaller and smaller. Over the years, Netflix has continued to keep up with customers’ interests with their algorithms, and by continually adding content to their platform. It also started creating original content productions, creating critically acclaimed series like “House of Cards” and “Stranger Things.” These award-winning shows brought in even more subscribers.

Impact of Netflix on the Entertainment Industry

Growing up, Netflix has always been part of my life and something I've had access to. Netflix recently reported that there are 84.11 million paid subscribers in the United States and Canada in the second quarter of 2024, representing almost 31% of all subscribers in these two countries. I can't imagine not being able to immediately have access to programming like TV series and movies by logging in to the Netflix app.