How Netflix became so popular

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Everyone knows Netflix. It’s become a staple in most households who use the internet to stream entertainment compared to using a cable provider. Using platforms like Roku, Xbox One, Apple TV, it’s easy to find yourself watching Netflix at home, work, or even school. More of these companies are offering Netflix as one of the free options they offer to their viewers, causing even more demand for the service.

Netflix offers many great movies and tv shows that we all love to watch when we have the time, but it got to this popularity from hard work, not being given the popularity and success. This story will cover some of the steps that led to the rise of Netflix. It will cover a lot of time, using flashbacks to see some other events that were important to the rise of the company, and it will also cover some information that many people don’t know about, such as how they got started.

Netflix actually got their name from a video store in California called Netflix, that only rented VHS tapes. The company eventually moved on to DVD rentals.

Blockbuster came first, established in 1994 in Dallas, Texas. They began expanding the chain in 1997 and reached a stock market value of $5.4 billion in August of 2000. In late September of 2000, they became the first company in the world to rent out movies and TV shows that were playable on the Internet.

Back in 1996, a company called DVDXC came out with a movie delivery service where you would be able to stream movies on your computer. Unfortunately, it was slow and never became that popular.

In 1997, an ambitious high-school dropout named Reed Hastings came to the realization that the new digital technology made it possible to transmit movies over the Internet to any computer. But he wasn’t the only one with that idea.

In 1997, RealNetworks launched RealPlayer, which would juggle music and video by allowing users to stream it to their PCs. Until that point, data from T1 lines and high-speed modems had been too expensive for the average person to play video. But as time went on, the number of home users with high-speed Internet access rose in number. And Real became the most-used application for multimedia on the Internet, one that soon renewed its dominance in streaming video and started a fight with the MP3 file-sharing service Kazaa.

That’s when Hastings went in search for some key new talent.

He landed on Rob Glaser, the former chief technical officer and director of Microsoft’s multimedia efforts and Ross Levinsohn, the former publisher of the Los Angeles Times. Hastings found they were both already working on similar projects. In 1997 they launched a new streaming media company called RealNetworks. But RealNetworks would be never as big as Netflix.

Netflix was founded in 1997 by Hastings, Glaser, and Levinsohn. The company started with Hastings and Glaser making a deal to provide free streaming of movies and TV shows to schools, little by little getting more popular, which eventually sold over 70 million DVDs. The next year, they offered their first streaming service, Bookmate. In 1999, the company was acquired by Blockbuster for $50 million.

The company continued slowly expanding the service to other areas, including colleges, libraries, and friends of friends services. Their service was growing rapidly, but they were not yet the leader in the streaming service area. That would come in 2002.

Fast forward to 2002. Netflix started to offer the same streaming service to its users. This was the first time the company started to rise in popularity. Hastings and his team of employees started to take notice. In 2004, they started to offer unlimited streaming in high-definition. That was the tipping point for their service.

Netflix started to rise up, rising faster than the other streaming companies. They got much cheaper than Blockbuster, and because of the success they were having, in late 2004 it was acquired by Blockbuster for $50 mil. Netflix had effectively become Blockbuster’s in-house streaming video unit.

By the end of 2004, they were being used by students as a primary method of viewing their work and school work. Since almost everyone has access to high-speed Internet, most of the online world found Netflix streaming options to be far more affordable and convenient. Before Netflix, most people could only get DVD renting if they had a friend with a DVD player or if they knew that movie or had blockbusters that they rented from Blockbuster.

Looking back, Netflix grew through hard work. Hastings and his team of employees continued to look through their options of places to improve and fine tune their company.

David Avino

David Avino

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