Netflix is ​​a giant of world entertainment. He started… with a mail-order DVD rental company

Regardless of whether Netflix ultimately acquires Warner Bros. or not, the very fact that its offer was accepted shows how strong the company's market position is today and how important it is to accurately predict market trends.

On December 5, it was reported that Netflix had agreed to acquire part of Warner Bros. for $72 billion. Discovery, but the transaction will not include television channels owned by WBD. However, it is not certain whether it will happen at all, because it must be examined in terms of its impact on the market, and three days later, Paramount Skydance submitted a higher offer.

This does not change the fact that the battle for WBD shows how successful a company that started as a mail-order DVD rental company has achieved. Netflix was founded in 1997 in California by two entrepreneurs – Marc Randolph and Reed Hastings. As the latter later said, the idea came to him when he forgot to return a VHS tape from a rental store and had to pay a $44 late fee. Randolph and Hastings, however, opted for DVDs, which had just appeared in the USA.

Netflix launched in April 1998 – initially it offered 925 films, i.e. almost all that were released on DVD in the USA at that time. Records were mailed with a prepaid return envelope, and customers paid for each rental. Shortly after the debut, Amazon's owner, Jeff Bezos, made an offer to take over the company – for $14-16 million – but it was rejected.

1999 – first subscription to Netflix

In 1999, Netflix introduced a monthly subscription that allowed for any number of rentals with no set return dates or late penalties, which was new at the time and set it apart from its competitors. In the first year after introducing this model, the company had 239,000. subscribers. The second reason for the success was the algorithm, which suggested further proposals based on the choices made so far.

Shortly afterwards, however, the dot-com bubble burst and Netflix began to generate losses. Randolph and Hastings proposed selling the company for $50 million to the Blockbuster chain – the same chain to which Hastings had to pay $44 for being late. It is quite ironic that Netflix quickly rebounded and went public in 2002, while Blockbuster went bankrupt in 2014. When Netflix went public, it had 700,000. subscribers, and four years later this number exceeded 5 million. Profits grew just as quickly – in 2003 they amounted to USD 6.5 million, and a year later – USD 49 million.

In 2007, Netflix again sensed the coming market change and launched a streaming service. Initially, there were only 1,000 films available on streaming, while 70,000 were offered on DVD, but the new form was quickly gaining popularity, so these proportions began to change.

2010 – international expansion and Canada

Previously operating only in the United States, Netflix began its international expansion in 2010, offering streaming in Canada. The following year, it expanded its services to 43 countries in Latin America and the Caribbean, including Brazil and Mexico, and in 2012 it entered the British, Irish, Danish, Swedish, Norwegian and Finnish markets.

At that time, Netflix invested in a new area of ​​activity and instead of being just a supplier of films, it also became their creator. The first series presented exclusively on Netflix was “Lilyhammer” co-produced with the Norwegian station NRK – its American premiere took place in February 2012. Netflix made all eight episodes available at the same time, which was a novelty compared to the traditional television model of presenting subsequent episodes every week.

A year later, Netflix's first fully original series, “House of Cards,” premiered. It turned out to be a great success, just like “Orange Is New Black”, released a few months later. Both received numerous nominations, including Emmy and Golden Globe Awards, as well as several awards. Two years later, Netflix's first own full-length film premiered – the American war drama “Beasts of No Nation”.

2024 and over 300 million subscribers

As Netflix's offering expanded, the number of its subscribers grew. In 2012 it exceeded 25 million, in 2013 – 40 million, and in 2014 – after entering six more European markets, including Germany and France – there were already over 50 million.

Netflix became a truly global platform in 2016, when it entered another 130 markets on the same day, making it present in 190 countries around the world. In 2017, a film made by Netflix received an Oscar for the first time – the award for the best short documentary film went to “The White Helmets”. In the same year – 10 years after the launch of the streaming service – the number of subscribers worldwide exceeded 100 million. In 2018, a Netflix film received an Oscar for the first time for the best feature-length documentary film (“Icarus”), and a year later the feature film “Roma” received three Oscars, including the best foreign language film.

In 2020, the number of subscribers reached 200 million, which means that it doubled in two years, and in 2024 it exceeded 300 million. The beginning of this decade also marked Netflix's entry into new areas – video games and sports broadcasts. And getting rid of those that have lost their raison d'être – in September 2023, Netflix ended its mail-order DVD rental service. Since its launch in 1998, Netflix has shipped 5 billion DVDs.

According to the company's financial report, in 2024 Netflix employed over 14,000. employees, the company's revenues amounted to USD 39 billion and pre-tax profit – USD 10.4 billion. The company's current stock market value is almost $430 billion. For comparison – the value of Warner Bros. Discovery, a company whose roots date back to 1923 and which for decades was a giant of the American film industry, is worth USD 73 billion. (PAP)

bjn/ rtt/