With a total net worth of $194 billion, Netflix sits at the throne of home entertainment. What was once a mere mail-order DVD rental business rose from the ashes of a dying industry to evolve into the largest TV entertainment service around the globe. Both its founders, Reed Hastings and Marc Randolph, back in 1997, saw the looming fruition that the DVD rental industry was about to go through, and hastily jumped on the wagon of a rather progressive mode of facilitating their customers.
Netflix, like many of its contemporaries, started off in the DVD rental industry with as a small niche as mail-order element which was considered to be just a more convenient manner of renting DVDs back in the day. Soon in 1999, Netflix liberated themselves of their previous pricing policies of each rental costing 50 cents, along with a return policy of maximum 7 days. Adopting a more cost-efficient strategy, Netflix introduced their popular subscription plans with a starting price of $15.95 with no return date policy. This was the foundation stone of the monopoly that Netflix has today in the entertainment market.
Boasting more than 182 million subscribers in over 190 countries around the globe, Netflix has, without a doubt, established a foot-hold in the internet economy. An original catalogue of a meagre 700 titles to choose from, Netflix now offers more than 13,900 movies and television series to pick from. Netflix, amongst other online streaming platforms, was a major proprietor of the demolition of the Big Cable and Blockbuster domination in the entertainment industry as the 21st century came into effect. As of March 2019, there are only 2 Blockbuster stores left in the entire world.
The irony is in the fact that that it was indeed a late fee of $40 on a Blockbuster DVD that Hastings had rented that sparked the notion to revolutionize the DVD rental industry. And it was a pivotal moment in 2000, when Blockbuster executives refused the proposition of takeover of Netflix for $50 million, only to see the latter completely wipe off the former from the home entertainment industry. Netflix has now grown to become not only the world’s largest online streaming platform but also a major TV Studio creating more than 500 television series and 6,700 movies with shootings and castings all over the globe.
Accepting the future of the industry for what it is and implementing different pricing and marketing strategies as time went by, Netflix rose up the corporate ladder and sits mighty high at the top from recent years. Providing subscription plans as cheap as $6 with an unlimited supply of home entertainment on-the-go has indeed been one of the most revolutionary business models of the past decade. Shifting from a catalogue based rental industry to forming a monopoly in the internet economy, Netflix continued to grow over the years. Competition and resistance from other streaming platforms such as Amazon Prime, Disney+ is tough, but none were able to destabilize Netflix’s high-profit control over the industry.