Netflix was founded in 1997 by a couple of software gurus who had the visionary idea of marrying two emerging technologies: DVDs and the Internet. At the time, just 36% of American adults had Internet connections at home, according to Pew Research Center. (Remember that sound of a dial-up modem?) And DVDs had just been introduced to the world. Just two decades later, Netflix is an entertainment giant that has morphed from its humble roots into a TV network in its own right. It still ships those iconic red envelopes, but these days, most people get their Netflix fix with a monthly unlimited plan.
The Evolution of an Entertainment Superstar
Arguably, the secret to Netflix’s longevity and robust growth is its adaptability. From its bare bones beginnings as a virtual DVD rental store to today’s model of streaming a virtually limitless treasure trove of entertainment, Netflix has always been quick to incorporate new technologies and consumer trends.
The Birth of Streaming Media
Streaming media is a perfect example of the company’s adaptability. During the early 2000s, industry experts predicted the company’s impending death. And it seems that prediction weighed heavily on the minds of Netflix execs. In a 2007 interview with The New York Times, the chief executive, Reed Hastings, said, “Because DVD is not a hundred-year format, people wonder what will Netflix’s second act be.” Not long afterward, Netflix introduced its streaming services to the world. The concept of streaming movies instead of downloading them first was so new that the journalist felt compelled to include an explanation of the technology.
The Transition from Rental Store to TV Network
Streaming technology enabled Netflix to connect with its customer base in a way that would have seemed unimaginable when the company was first founded—and customers have responded by bumping the total number of subscribers up toward the 100 million mark. In fact, in the U.S., Netflix boasts more subscribers than the major cable companies, thanks in no small part to its ever-growing stable of acquired shows (House of Cards) and originals (The Crown, Stranger Things, Orange Is the New Black, and so many others).
The Challenges Ahead for Netflix
Netflix may be one of the greatest tech innovators, but it will need to keep on finding new ways to keep its customer base engaged. Amazon, Hulu, and YouTube are all working on challenging Netflix’s current streaming dominance.
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