Netflix is the big streaming giant used in countless households around the world. But Netflix started with something else that doesn’t really exist anymore: video rentals.
What is the current status of Netflix?
Everyone knows Netflix and most people have probably already had a subscription to the streaming service. But before Netflix became a giant that produces its own films and series, it was involved in an area that doesn’t actually exist anymore: video rentals.
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Netflix and the start as a video rental company
How did Netflix start? Before the company became a massive streaming giant, it started as a video rental company in 1997. Marc Randolph and Reed Hastings founded the company. Marc Randolph explains his initial idea on YouTube by saying that he wanted to solve a problem in a specific area.
At that time, video rental was a big business with a lot of turnover. The biggest name in the space was Blockbuster. But according to Randolph, many customers were dissatisfied with Blockbuster and he wanted to change that.
At Blockbuster and similar rental companies you had to go to the stores and pay comparatively high fees if you returned something late. Netflix began delivering DVDs by mail in 1998. That was much more pleasant for the customer.
According to Randolph, they also speculated on DVDs, which were not yet very common at the time. Other distributors mainly had VHS tapes.
Netflix quickly recognized new options: They offered the rental service online with a subscription. In other words, you paid monthly fees to choose online DVDs that were then delivered to your home.
These were Netflix’s innovations at a glance:
The shift to subscription changed Netflix
In the interview, Randolph explains why it was so good that Netflix offered her DVDs with a subscription. Non-subscription fees disappeared and people could rent their DVDs without thinking twice. The highlight was that the customer had to send the DVD back when he rented a new one.
According to Randolph, its big competitor Blockbuster had a major shortcoming. Everyone hated the fees for turning in a DVD late. Netflix didn’t have anything like that.
VdoCipher mentions another advantage Netflix had over Blockbuster: recommendations. Even in the DVD era, an algorithm made it possible to recommend other series and films to customers. The offer was called Cinematch. This meant there was less pressure to get new releases to customers quickly and the library could be distributed more evenly.
Netflix quickly recognized streaming as a new option. In 2007, Netflix brought streaming to some customers for the first time. It started in January for some users and was an add-on for users with DVD rental subscriptions. This had 2 advantages:
At that time, Netflix didn’t have a large streaming offering. According to VdoCipher, at the beginning there were only 1,000 titles available to stream. As a DVD rental company, there were almost 70,000 titles. The change came in 2008 when a deal was signed with the cable TV channel Starz. Netflix received the rights to 2,500 films and series. This also included Disney productions that were still a long way from their own service.
Netflix and streamers changed viewing habits
At some point an interaction arose between the broadcasters and Netflix. The broadcasters realized that if they offered older seasons and episodes on Netflix, more viewers would tune in to the current episodes on television. Viewers’ viewing habits towards series slowly changed.
In the past, you could only watch the episodes that were currently playing on television. If you wanted to catch up on previous episodes of a series, you had to wait for new releases or buy expensive season boxes, which sometimes took a long time to arrive. This didn’t matter for sitcoms, because episodes usually didn’t build on each other.
The rise of quality TV through drama series such as The Sopranos, The Wire, Mad Men and later Breaking Bad changed the familiar structure that sitcoms had established. Suddenly a big story with a common thread was being told. The episodes were based on each other. If you didn’t have time for an episode, it was harder to keep up.
Netflix and similar platforms counteracted this. Suddenly you could watch entire seasons whenever you wanted. Breaking Bad creator Vince Gilligan even sees streaming platforms as the reason why his series became so successful (via Wired).
Binge-watching became established and people watched seasons of series in one go.
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In-house production and the current status of Netflix
In 2013, Netflix even started producing its own productions. The first to be ordered by Netflix was the successful series House of Cards with Kevin Spacey. Series like Stranger Things and films like Red Notice followed later.
Netflix has now become a production giant. There’s everything: documentaries, series, films and various formats like Too Hot to Handle. Netflix also wants to be involved in high-quality productions and exploits films in the cinema so that they can be accepted for the Oscars.
With films like Roma, Marriage Story or Nothing New in the West, you’ve already been able to pick up a few prizes.
Nowadays there are countless streaming services that, like Netflix, want a piece of the pie when it comes to DVD rentals. Disney Plus, Amazon Prime, Paramount or WOW are not the only services in Germany. In the USA there are even many more.
The services are increasingly competing with in-house productions or purchased films and series. The customer friendliness that Netflix had over Blockbuster is no longer evident. Netflix was one of the first services to ensure that accounts could not be shared across multiple households.
What do you say about Netflix? Do you use the service diligently or do you prefer other streaming services? What is your favorite Netflix original? Write it to us in the comments. If you need a recommendation for Netflix, then you can check out this list: 5 Underrated Sci-Fi Movies on Netflix That Are Worth Watching and Deserve More Viewers