Blog Post #4

    Netflix was founded in 1997 by Reed Hastings and Marc Randolph. Reed Hastings came up with the idea of a subscription based movie rental service after he got charged a huge late fee for a VHS tape. Netflix started to offer their online subscription DVD rental service with numerous movies and television shows. They delivered the DVDs through the mail in custom envelopes with more than one hundred distribution centers. It allowed customers to rent as many movies that they wanted for a flat monthly fee. Netflix started the Netflix Prize contest for a million dollars to improve their recommendation system. The prize was awarded to a team of mathematicians, computer scientists, and engineers from all over the world three years later. Netflix started to offer subscribers the option to stream some of their movies and television shows straight to their homes through the internet in 2007. Netflix was able to partner with numerous electronic products that included video game consoles and Blu-Ray players to promote their video streaming service. In 2010, Netflix released their streaming only subscription option in the United States. Also in 2010, Netflix started to expand their streaming only subscription plan outside the United States starting in Canada. By 2016, Netflix was able to offer their subscription service in more than 190 countries and streaming services. Even Though Netflix’s streaming subscription service continued to grow, having over 200 million subscribers by 2021, their DVD rental system was still profitable. Netflix eventually started to release original content for streaming in 2013. Their first Netflix original content of any kind was the series House of Cards. As of 2021, Netflix has more than 2,400 original content on their streaming platform. 

    Netflix completely changed the way that people view video content. Before there was Netflix, the only way to view content was by renting VHS tapes or DVDs, or just watched whatever was on live TV. The creation of Netflix allowed people to watch whatever they wanted, when they wanted. People do not have to sit through commercials anymore. It also caused the decline of people having cable and only having streaming services. In 2018, the percentage of people that got rid of cable increased by 33%. Netflix also impacted the content we watch. In 2018, Netflix spent 13 billion dollars on content, and 85% of that content was original content. The reason that Netflix spends so much on original content is because that is the content that sticks out to people because it could only be streamed on Netflix. The original content on Netflix has been wildly successful. Netflix was one of the first companies to use the internet for their entire business. Their business model is the reason they were able to develop their algorithm. Netflix says that 80% of content watched on their platform come from recommendations. In a world where companies are constantly trying to predict consumers, Netflix has seemed to master it. Netflix has caused the decline of movie theaters and traditional television.   

Sources: 

https://www.britannica.com/biography/Reed-Hastings 

https://www.forbes.com/sites/blakemorgan/2019/02/19/what-is-the-netflix-effect/?sh=4e6e708e5640