The Rise of Netflix The giant you know, the story you don’t
Netflix was founded by two entrepreneurs, Marc Randolph and Reed Hastings. They got the idea of a movie rental service via mail while carpooling between their homes across Santa Cruz, California. They experimented sending DVDs and CDs across their homes, first.
As soon as they saw the revolutionary potential of their idea, they officially launched Netflix on August 29, 1997 and the rest is history.
Additionally, Netflix got its name by combining two words- “Net” meaning Internet and “Flix” meaning movies.
Inspired by Amazon, Randolph wanted a similar model for transporting the movies stored in VHS tapes. However, shipping VHS tapes proved to be a large investment in something that’s fragile. But their idea was saved by the introduction of DVDs in 1997 in America. And so began the story of OTT giant, Netflix.
Hastings invested $2.5 million in cash into Netflix. And there after, as the first DVD rental and sales site, Netflix.com was launched in Scotts Valley California in 1998 with only 30 employees.
As the technology advanced, by 2007, Netflix shifted its services online to avoid the cumbersome and heavy investment task of shipping globally.
The introduction of subscription plans proved to be one of the best strategic changes in their business model.
Expansion and Growth:
After Netflix’s Video on Demand service’s success, they began their first expansion to Canada in 2010.
This was their first major successful international expansion and Therefore by 2015 Netflix was already established in over 50 countries.
Netflix received positive reactions and engagement from their users due to their ironclad provision of exactly what their customers wanted as well as when and how they wanted it.
Netflix increased their overwhelming expansion over the course of the last five years. Today, Netflix operates in 190 countries with over 203 million people paying for its services.
Netflix in India
Netflix decided to expand to India in January 2016. However, with other platforms such as Amazon Prime, Hotstar, Zee5 etc, already having a tight hold of the market, it struggled to appeal to the Indian users. Additionally, with several local OTTs already offering attractive rates for their services, Netflix failed to crack the Indian market. As a result, there was a price drop in its subscription plan by 60% around December 2021.
Despite of lacking behind in terms of local quality content in its library, Users experience and sophisticated quality of service allowed Netflix to gather over 5+ million users in India.
The journey of Netflix from a movie rental service to a global VOD is surely inspiring.
The most important strategy that allowed Netflix to achieve its massive success, is that it’s not afraid to change its business model and approach to the market.
Having versatile and flexible strategies in terms of production, market appeal and content availability without compromising its supreme quality, allowed Netflix to become the OTT king today, however the path ahead is not very smooth for them because of the rising competition in the OTT platform.