Netflix: the story of the video shop that became a streaming giant and how to invest in it

It is practically impossible to talk about Netflix and find someone who does not know the company. The company recently entered the lives of the Spanish people and managed to revolutionize entertainment worldwide with terrifying speed. 

In addition to the distribution of series and films at scale, which gives the subscriber the option of controlling when, where and how they view the content, the company also owns popular series and films – already seen The House of Paper, House of Cards, Stranger Things, Narcos and Dark?

But do you know the history of this streaming giant? 

Few people know this, but Netflix started out as a DVD rental company. Since then, the transformation has been enormous, to the point that Netflix has become the 23rd largest company in the world by market value, according to October 2020 data.

In this article we will learn about the history of Netflix and its main figures, to understand how to invest in Netflix and become a partner of one of the most innovative companies in the world through the Stock Exchange.

Who is Netflix

The Netflix Inc. website and logo are displayed on laptop computers arranged for a photograph in Washington, D.C., U.S., on Tuesday, Jan. 21, 2014. Netflix Inc., the largest subscription streaming service, is expected to release earnings data on Jan. 22. Photographer: Andrew Harrer/Bloomberg via Getty Images

Netflix is a producer and a platform for streaming gifts in the daily lives of millions of people. It is a multitude of marathons for children, young people, adults and even seniors who enjoy film series of all genres, available in the company’s catalogue, whether on the computer, mobile phone or intelligent television.

With more than 20 years of history, the platform has license agreements with major companies such as Paramount Pictures, Sony Pictures and Televisa. The latter is the queen of Mexican soap operas. How can we forget Paola Bracho?

In addition, Netflix also invests heavily in its own productions, in order to create a differential and boost its profits. Peaky Blinders, Black Mirror and Stranger Things are just some of the examples you are probably familiar with.

Netflix’s most famous films and series

The IMDb (Internet Movie Database) website is a super reliable online database that collects diverse information and reviews on movies, series and even games. 

One of the data available for consultation is the score that titles receive based on various factors used by users, most of them with a reasonable knowledge of the subject, even if only as a spectator.

This, by the way, is great advice: if you want to know if a job is worth looking at, look for its qualification on the website. If it’s too low (something under 6), it’s good to be suspicious and look for other references before you’re disappointed.

Based on the IMDb ranking, we bring together the best and most famous Netflix productions:

  • Strange things;
  • Ozark;
  • The Punisher;
  • Mindhunter;
  • The Paper House;
  • Sex education;
  • Beasts of no nation;
  • Okja;
  • Rome;
  • Must Potatoes.

You’ve probably seen or heard of many of these productions, but Netflix’s journey to become one of the world’s most successful entertainment platforms was a long one. Shall we go and see?

Netflix history: from video shop to streaming giant

Netflix was created in 1997 by Marc Randolph (advertising and sales specialist) and Reed Hastings (mathematician and master of artificial intelligence). At that time, the company had a very different approach to the one we know today: the focus was on film rental.

The following year, the company decided to improve the service and the DVD films started to be delivered directly to the customers’ address with a pre-established loan period. The items were then removed and, if there was a new order, the new DVDs were already delivered to the customer.

The process was carried out through the company’s website and a charge was generated for each title requested, a business model of a rental company with the differential of home delivery and collection.

It was in 1999 that part of the current business model, that of paying a monthly subscription, came to Netflix and brought the company’s fame, which is even greater today. 

The proposal was basically the same: you paid a fixed amount each month and, in return, you could watch as many films as you wanted, without having to pay any other amount.

Two purchase possibilities

To date, Netflix has had two major sales opportunities. One was when Amazon CEO Jeff Bezos offered £12 million for the deal in 1998. Value that was rejected by Randolph and Hastings. Today, as you probably know, Amazon Prime Video is one of the company’s biggest competitors, isn’t it?

The other opportunity came in 2000. This time, it was Netflix itself that offered itself to another industry giant: Blockbuster. Compared to the market value of Netflix today, the proposal was a mere 50 million dollars.

The deal did not go ahead because the company was not yet as profitable as it is today and apparently Blockbuster was not worth the acquisition. The plot twist of this plot is tasty: in 2020, Blockbuster was extinguished.

Randolph’s departure

In 2002, Marc Randolph decided to leave the company and leave the operations to Hastings, because, as he has said several times since then, he preferred to act on the operation at a time when Netflix was still in its start-up phase.

Later, Marc co-founded a technology company (in the field of data analysis) and now works with investments, as well as contributing to the development of new entrepreneurs.

The IPO in 2002

It was also in 2002, long before it became a streaming giant, that the company made its public stock offering (IPO) on NASDAQ. At that time, the price was only 1 pound per share.

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