Entertainment and Technology are continuing to transform each other as they have been doing for over a hundred years, from radio to broadcast TV broadcast TV to cable TV and now to internet TV. Reed Hastings was born in Boston Massachusetts on October 8, 1960 and got his master's degree from Stanford in computer science in 1988. Hastings then got a job at adaptive technology where he worked till 1991 and then left to start his own company named Pure Software. A company that built tools for UNIX software developers the company grew at a rapid pace with sales doubling every year but Hastings soon started facing challenges as he lacked the required managerial experience and hence in 1996 pure software was sold to its biggest rival Atria software for 750 million dollars. Now with all this newfound wisdom and money from his last venture, Hastings was already thinking about his next venture but this time he was not alone as he had found himself a business partner, Marc Randolph. Marc Randolph was then the vice president of Pure Software. The duo hanged around for few months searching for an idea for their next venture until the idea of Netflix came into play but how the idea of Netflix came is a different story it all started when Blockbuster forced has things to pay $40 need fee as he was six weeks late for returning Apollo 13 and later on his way to Gym, Hastings realized that Gym's had a much better business model as you could pay $30 or $40 a month and workout for as little or as much as you wanted and hence the duo started Netflix.
So, Netflix started as a subscription-based DVD rental business where a customer had to pay a monthly fee and could rent three DVDs at a time they could keep the DVDs with them for as long as they wanted and then return a DVD to get the new one. Netflix went live in 1998 with the video library of approximately 900 titles. People loved the concept so much so that it became an instant hit and in 1999 Netflix raised a whooping thirty million dollars in venture funding. Although Netflix was growing at a tremendous rate but it was still losing money, so they decided to fight for an IPO in 2000 but around this time investors had realized the existence of a dot-com bubble as majority of the internet companies were nothing more than a Joke. Hence Hastings scratched the idea for an IPO but netflix still needed money to survive and hence they had no other option but to turn to Blockbuster. We went up to the 27th floor of this building.we were ushered into a conference room which seemed to be about the size of this room. All the blockbuster guys came in in their very expensive suits and we were there in our Silicon Valley t-shirts and jeans and we all sat down to pitch and we said it's great we will do the online business you'll do the stores we will have synergy won't that be great and they shook their heads in the right place and then they asked the big question "How much should we pay for you?"and my partner Reed screwed up his courage and he said 50 50 million dollars and that's exactly the reaction that they had, so the meeting went downhill very quickly after that and it was a long quiet ride on the plane back home to California and I remember so distinctly sitting there quietly just thinking, oh now we're gonna have to kick their ass and that's really what happened post-2000 things started to turn around for Netflix, it reached a milestone of 700,000 subscribers in 2002 and initiated the IPO in the same year raising eighty two point five million dollars in 2003, Netflix showed its first profit of 6.5 million dollars on revenues of 272 million dollars.
Blockbuster on the other hand started it's journey down hill. They were late in entering the online DVD rental business, they finally stopped charging late fees but removing late fees from their business model resulted in Serious declines in their revenues and at the same time their overheads were rising because they had to run all these retail stores. So amid all this chaos investors lost their faith in the company and blockbuster filed for bankruptcy in 2010. Hastings had considered offering movies online but it was only in the mid-2000s that the data speeds and bandwidth costs had improved sufficiently to allow customers to download movies directly from the net. The original idea was a Netflix box that could download movies overnight and be ready to watch the next day but before going public with the idea in 2005 Hastings discovered YouTube and witnessing how popular it was despite the lack of high-definition content he decided to scrap the idea of using a hardware device and replace it with a streaming concept. Hence in 2007, Netflix launched its streaming service and coincidentally it was the same year when Netflix delivered its billion DVD. Up until this point Netflix was something only the Americans were enjoying but in 2010 Canada became the second country in which Netflix became available fast-forward to today it is operating in over 190 countries and close to 78 million of its 150 million subscribers are outside the US. Netflix was quick to realize that sooner or later they will face stiff competition from other industry giants and hence in 2011 Netflix began creating its own content starting with House Of cards which debuted in 2013.
Stranger Things, Glow, Orange Is The New Black and the crown are just some of the others successful Netflix original's since.Netflix overall have won a total of 72 awards till 2019 including six Oscars, two Golden Globes and sixty-three Emmys. The streaming wars are just heating up as established industry leaders like Netflix Hulu and Amazon Prime are going to face stiff competition from Disney+, Apple TV+, ATT's HBO Max and Comcast's NBC Universal. Seeing the success of Netflix's original content, it may seem that Netflix will easily survive the war but that I guess is not entirely true as Netflix is soon going to lose some of his most watch content, in 2018 its top two most streamed shows in the U.S were Friend sand. The Office both of which are being pulled for HBO max in 2020 and NBC Universal in 2021 respectively but Netflix is leaving no stone unturned and is spending billions of dollars to create original content. In 2018 alone Netflix spent 12 billion dollars building its library of original films and series and is expected to spend around fifteen billion dollars on original content this year. While Netflix is running into debt trying out new shows, Disney already has the best of the best with it. Disney owns content like Avenger's, Star Wars series,Toy Story series plus it also owns 60% of America's second largest and fastest growing streaming service Hulu. Apple, on the other hand, have pledged six billion dollars for original shows and movies for Apple TV+and is also willing to cut everyone else on price asking for only four point nine nine dollars per month. This Is Crazy. Although Netflix have defeated a Goliath before but this time the situation is completely different as this time Netflix isn't facing an inefficient competitor but many strong efficient and active competitor's who will do anything and everything to win this war.So, let's see what the future holds for Netflix. So, that's all for today.......
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