Whoever wants to watch some TV shows, movies and to chill out a bit, goes and pays Netflix that subscription.
Nobody has both, more watched and more unwatched shows and films than the tech giant that we all love and sometimes hate, Netflix.
Read and chill.
Everyone knows what Netflix is, but we still want to clarify in our own words. It’s not just a streaming service. It is a paid web directory for the entertainment industry, a portable movie theater for an average consumer, and most importantly, a meme.
So much time of ours is spent looking at the screen on which we are presented with super addictive shows and latest films that we are so eager to be one of the first to watch. And the story of the company! Wait for it because it is going to get red hot.
A company with so much hype can’t be ignored.
Netflix has become the largest movie and TV show streaming service of this century. It allows everyone to be watching whatever they want, whenever they want on any device you can name.
However, thinking about how it started and it’s humble beginnings, we should have a quite different picture at the end. The story begins when company was founded in 1991 by Reed Hastings and it wasn’t Netflix at first, nor was it a movie streaming service.
It was called Pure Software and it provided one of the topnotch debugging systems for computers, most notably, the UNIX system.
Pure Software was doubling it’s revenue every single year and was finally sold for 700 million dollars. Hastings got very rich and for some time was just hanging out if you can say that. The idea for Netflix struck the entrepreneur when he was charged humongous late fees for the movie he didn’t return on time.
So he took his friend for the adventure and started a movie rental service in 1997 called Netflix which would mail DVD’s to its customers. The biggest player in the video rentals at the time was, of course, Blockbuster.
The DVD player had been invented only 3 years ago at that time in Taiwan, a great job by Sony. And the founder, Reed Hastings was betting his entire company on the possibility that the old video tapes could be replaced by the revolutionary DVD‘s.
After months of testing, trying to mail the DVD’s to himself, thinking of strategies for getting Netflix DVD’s to the consumer, Reed Hastings, with 30 of his employees was ready for war.
Offering free Netflix packages for people who bought the DVD players and other insightful strategies started putting the company on the pedestal in the video rental industry.
Soon, companies like Sony and Toshiba came into action, asking to get into partnerships with Netflix. The company was doing okay and was very likable by people because Netflix offered great plans, without any late fees and due dates.
With 10,000 orders for DVD’s each day Netflix might have seemed as a powerful company, but it was still nothing compared to the billion-dollar giant Blockbuster. So a reasonable move for Hastings seemed to be to try partnering up with Blockbuster.
And Blockbuster just laughed at the proposal, which consisted of managing an online division under Blockbuster.com name. Netflix was now losing money fast although the number of daily orders was massive.
There wasn’t much there to do apart from going public and that’s what Netflix did in 2002.
Things started working out from the financial side for the company but Blockbuster and Walmart also wanted a piece of that new DVD rental mail pie.
Although Netflix was having more than 1 million DVD orders per day and was still growing, the margins were crushing the company and once again it could not turn profitability on their side.
However, soon after, Blockbuster and Walmart both saw that they got into mailing discs too late and stepped down from the DVD rental mail battle. After this step-down it all was clearly over for Blockbuster.
As technology advanced and a large company was not able to fulfill their customers’ needs, Blockbuster went bankrupt in 2010. With Walmart and Blockbuster stepping down, Netflix now was the only game in town.
With all the cards on the Hasting’s side, he was able to do what he was willing to do from the very start, video on demand, on the Netflix website. At first, it did not charge an additional dime for any amount of video streamed on the platform.
Then, Netflix was welcome to start making deals with such companies as Starz, Paramount, Sony, Metro Goldwyn Mayer, Lionsgate and more. Successful growth led the company to even more deals with Playstation, Xbox, Samsung, Apple, etc.
Netflix, with even more ideas at hand started making it’s own original content. One of the first originals was the well-known TV show called “House of Cards”.
TV shows and documentaries like “Orange is the new black”, “Stranger things”, “Arrested development”, “Lucifer” and dozens of other titles.
Quite a recent merger with Qwickster should also be addressed. This one did not go as well as expected. The army of users of the platform were outraged that such low-quality video streaming rip-off could be endorsed by Netflix itself.
After this unsuccessful contract, the stock of Netflix lost more than 2/3 of its value. It was a complete disaster that is still being discussed till this day. No one of the previous Netflix’s achievements were recognized after the Qwickster affair.
However, a successful partnership was created when the company had introduced it’s platform to Canada.
After that, a deal with Marvel had been introduced. Netflix now had 5 Marvel-endorsed shows under it’s wing, most notable ones are “Daredevil” and “The Punisher”. A large part of its original shows had reached a significant amount of viewers who were fully happy with their experience.
Well, the company itself had invested millions of dollars into the creation of it’s originals. Recently the company had a 4 picture deal with Adam Sandler. The movie “The Ridiculous Six“, for example, was a terrible remake of “The Magnificent Seven”, a classic from the 60s.
Other Netflix originals with Adam Sandler have been doing especially well. “Uncut Gems“, a 2019 film about a highly troubled jeweller was an incredible success. It took Netflix 19 million dollars to produce this picture.
Netflix is expected to do another 4 picture deal with Adam Sandler because the audience had responded really well and the investments are worth the risk. Currently Netflix is still, like every other company looking for opportunities of enterprise. With competition like Hulu, HBO and Amazon rubbing side-to-side to each other.
The stock. Now higher than ever before is conquering new waters with it’s shows. Mark Cuban is one of investors who highly believes in this company and vouches for it.
Cuban, coming from the same industry background Netflix is in, completely understand the business model and is familiar with the difficulties that the company encounters on a daily basis.
This experienced and influential entrepreneur, just like Netflix had his humble beginnings with Broadcast.com and later was bought out by Yahoo!. Internet radio is quite the same as movies on-demand.
When we say stock is popular, we really mean it. Would institutions like Vanguard Group, BlackRock or Capital Research Global Investors each own a 7 to 8% share of all the company shares outstanding?
Netflix is Capital Research Global Investors’ second-largest holding, according to Investopedia.com.
Netflix rubs in between different mutual funds, ETF’s and indexes held by institutional investors. It is a stock that represents great management, stability, leadership in the industry. VOO index has 0.72% of Netflix by the way.
Here a famous line, well, more of a fact for you: If you had bought Netflix shares in 2007 for $1000, you would have about $160,000 worth of stock as of today, September 25th, 2020. If you are reading this in the future, you would be an even luckier investor.
However, conservative perspectives can be heard from the experts, predicting only about an 8% growth for the upcoming year. But god knows what the stock is going to be worth in the future when Netflix is aggressively investing in itself and scaling up with topnotch TV shows and films each year.
One of the crucial things to mention is that from the early DVD days, Reed Hastings, the founder had an algorithm developed which recommended shows the customer might like, based on the shows watched by him earlier.
That brilliant algorithm is still around and well-working. Using it Netflix can produce shows that we don’t even know we would like to watch. Sounds scary, but it is revolutionary, very useful and cool.
Google and Facebook‘s algorithms aren’t that well-minded, most of our actions on the internet are used for optimizing advertisements.
To make a well-put conclusion it needs to be said that Netflix had conquered our hearts, feelings, wallets and routines.
Nobody these days can find a free movie with great HD visual quality these days, but this company has it all and does not get greedy with our monthly payment plans.
We very much respect claims to fame through hardship.
That’s exactly what Netflix represents as a company. Strategic moves and plans for deals, significantly hard work and love for the customer brought this movie streaming service to the top.
A strong leader with customer care, that’s also what the company could be called.
Getting through it’s fight with Walmart and Blockbuster, Netflix had showed how a small and money-losing company can achieve generational wealth, authority and become one more cultural phenomenon of our century.
And the stock performance is amazing.