Netflix was founded in 1997 after its creator, Reed Hastings received a late fee from Blockbuster, and so he started his own company. Netflix started as a DVD rentals service by mail with no late fees and due dates, obviously this made the subscription appealing, but Netflix quickly transformed into the empire it is today.
Netflix is a television show and movie sharing paid service, it really changed the way in which people watch shows and movies. Netflix releases an entire season of a show at a time, making it exceptionally easy to watch ‘just one more episode’. After an episode on Netflix finishes, the next episode will play automatically, and after a season finishes, the next season will start automatically. This differs from watching shows on DVD, where you would have the option to stop watching a show when you had to get up off the couch and change the DVD, or when watching shows on television where a new episode is released every week.
In Australia, Netflix was this incredible mythic site that was heard of from America. So even before Netflix even appeared in Australia, it was building a following, it had a reputation that was growing, and before long, it was here, Netflix in Australia. The Australian version of the service may not have as many TV shows and movies as the American version, but Netflix still dominates. S
- Worldwide, Netflix has around 74 million subscribers [2015 Q4].
- Netflix users watch around 7.7 hours per week. Well above any other competitor.
- Netflix outranks cable TV in the US
But what has this convenience of Netflix destroyed?
“Back in 2000, Reed Hastings approached former Blockbuster CEO John Antioco and asked for $US50 million to give away the company he founded — Netflix.” This offer was declined by Blockbuster and very regrettable, because “Netflix’s market value now stands at $32.9 billion”, and Blockbuster filed for bankruptcy on September 23rd 2010 after its “attempt to overcome nearly $1 billion in debt.”
But it wasn’t just Netflix that led to Blockbusters decline and eventual bankruptcy, all kinds of online streaming programs offered more convenience and simplicity, even just the age of the internet opened up avenues for all kinds of new medias. Even illegal movie sharing and downloading sites contributed to Blockbusters, and similar companies declines. The growth of the Internet would have to have been the cause of the first half of Blockbusters decline, but after Netflix started taking off, Blockbuster really hit the bottom. [As seen in the below chart]
Netflix revolutionised the way in which individuals can watch television shows and movies. Although it took out some main names in the process (Blockbuster), it demonstrates how a company can evolve from something so simple into an empire that becomes a household name. The simplicity of Netflix is just too convenient to bother with competitors. But with this Blockbuster and Netflix story, it demonstrates how easy it could be for another company with a better idea to come around and take Netflix out of business.
Chong, 2015, ‘Blockbuster CEO once passed up a chance to buy Netflix for only $50 million’, Available From: < http://www.businessinsider.com.au/blockbuster-ceo-passed-up-chance-to-buy-netflix-for-50-million-2015-7?r=US&IR=T >
Baxter, 2015, ‘Netflix Is Now Worth More Than CBS’, Available From: < http://www.cinemablend.com/television/Netflix-Now-Worth-More-Than-CBS-71382.html >
Cenksy, 2010, ‘Blockbuster files for bankruptcy’, Available From: < http://money.cnn.com/2010/09/23/news/companies/blockbuster_bankruptcy/ >
Hastings, 2005, ‘How I Did It: Reed Hastings, Netflix’, Available From: < http://www.inc.com/magazine/20051201/qa-hastings.html >
Salles, n.d. ’13 Surprising Facts About Netflix That You Didn’t Know’, Available From: < http://movies.allwomenstalk.com/surprising-facts-about-netflix-that-you-didnt-know >