Netflix History

Netflix was founded on August 29, 1997, in Scotts Valley, California, by Marc Randolph  and Reed Hastings. Randolph worked as a marketing director for Hastings' company, Pure Atria.  Randolph was a co-founder of MicroWarehouse, a computer mail order company, and was later employed by Borland International as vice president of marketing. Hastings, a computer scientist and mathematician, sold Pure Atria to Rational Software Corporation in 1997 for $700 million in what was then the richest acquisition in Silicon Valley history. They came up with the idea for Netflix while commuting between their homes in Santa Cruz and Pure Atria's headquarters in Sunnyvale while waiting for government regulators to approve the merger, although Hasting has given several different explanations for how the idea was created. 

Hastings invested $2.5 million in startup cash for Netflix. Randolph admired the fledgling e-commerce company Amazon and wanted to find a large category of portable items to sell over the Internet using a similar model. They considered and rejected VHS tapes as too expensive to stock and too delicate to ship. When they heard about DVDs, which was first introduced in the United States on March 31, 1997, they tested the concept of selling or renting DVDs by mail, by mailing a compact disc to Hastings' house in Santa Cruz. When the disc arrived intact, they decided to take on the $16 billion home video sales and rental industry. Hastings is often quoted saying that he decided to start Netflix after being fined $40 at a Blockbuster store for being late to return a copy of Apollo 13. But this is an apocryphal story that he and Randolph designed to explain the company's business model and motivation.

Netflix was launched on April 14, 1998, as the world's first online DVD rental store,  with only 30 employees and 925 titles available, which was almost the entire catalogue of DVDs in print at the time, through the pay-per-rent model with rates and due dates that were similar to its bricks-and-mortar rival, Blockbuster.

On October 1, 2008, Netflix announced a partnership with Starz to bring 2,500+ new films and shows to "Watch Instantly", under Starz Play.

In August 2010, Netflix reached a five-year deal worth nearly $1 billion to stream films from Paramount, Lionsgate and Metro-Goldwyn-Mayer. The deal increased Netflix's annual spending fees, adding roughly $200 million per year. It spent $117 million in the first six months of 2010 on streaming, up from $31 million in 2009.

On July 12, 2011, Netflix announced that it would separate its existing subscription plans into two separate plans: one covering the streaming and the other DVD rental services. The cost for streaming would be $7.99 per month, while DVD rental would start at the same price. The announcement led to panned reception amongst Netflix's Facebook followers, who posted negative comments on its wall. Twitter comments spiked a negative "Dear Netflix" trend. The company defended its decision during its initial announcement of the change:

"Given the long life we think DVDs by mail will have, treating DVDs as a $2 add-on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited-DVDs-by-mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs-by-mail offering."

In a reversal, Netflix announced in October that its streaming and DVD-rental plans would remain branded together.

Netflix is an American over-the-top media services provider, headquartered in Los Gatos, California. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, the company's primary business is its subscription-based streaming service, which offers online streaming of a library of films and television programs including those produced in-house. 

Netflix's initial business model included DVD sales and rental by mail, although Hastings jettisoned DVD sales about a year after Netflix's founding to focus on the DVD rental business. In 2007, Netflix expanded its business with the introduction of streaming media, while retaining the DVD and Blu-ray rental service. The company expanded internationally, with streaming made available to Canada in 2010  and continued growing its streaming service from there; by January 2016, Netflix services operated in over 190 countries – it is available worldwide except Mainland China, Syria, North Korea and Crimea.

Netflix entered the content-production industry in 2012, debuting its first series, Lilyhammer. It has greatly expanded the production of both film and television series since then, offering "Netflix Original" content through its online library of films and television. Netflix released an estimated 126 original series or films in 2016, more than any other network or cable channel.

As of April 2018, Netflix had 125 million total subscribers worldwide, including 56.71 million in the United States. Their efforts to produce new content, secure the rights for additional content, and diversify through 190 countries has resulted in the company racking up billions in long-term debt: $21.9 billion as of September 2017, up from $16.8 billion from the same time the previous year, although only $6.5 billion of this is long-term debt; the remaining are long-term obligations.