Netflix turns 25: how did the leading streaming company come about?

When Americans Reed Hastings and Mark Randolph founded a DVD rental company 25 years ago called Netflixno one could have imagined that this company would raise a capital of $36 billion for the distribution of audiovisual content.

Hastings often tells a story that tells the origins of what is now the first platform for streaming around the world in anger after paying a $30 fine for late return of the Apollo 13 tape to his trusted video store.

Although the reality is that before August 28, 1997, the Netflixthe idea of ​​opening a VHS home video service was already in the mind of Hastings.

The popularity of the DVD, an initial catalog of about a thousand titles, and the ability to return films a week later shaped a business idea that has grown into a giant over the past decades with over 11,500 employees.

While it is true that the two characteristics that made Netflix from the start, they were an option for customers to pay a $20 monthly subscription to store DVDs for weeks at a time, and the ability to take full sagas or series seasons to watch back-to-back.

“They weren’t the only ones offering these services at the time, but they have since managed to take the lead in the market,” explained Syracuse University professor and founder of the Belair Television Center, Robert J. Thompson.

In 2002, the company went public with a cost of one dollar per share, and five years later began streaming made his assets skyrocket.

By 2010, the company, based in Los Gatos (California, USA), already had over twelve million subscribers, mostly from the USA.

In addition, the massive purchase of smartphones around the world has enabled millions of new subscribers to tap into the large catalog of online movies and series.

“By number, Netflix has a library of original titles with intellectual property rights as large as that of Paramount+ or Disney+,” said Amanda Lotz, streaming and now professor at the University of Queensland (Australia).

Netflix became the platform with the most Emmy nominations in 2018 with 23 awards, and a year later won four Oscars for “Roma” and “Point. End of offer.

Then came the COVID-19 epidemic and successive lockdowns that caused a rebound in business numbers. Netflix until 2022, thanks in part to successful productions such as The Squid Game (2021) or the fifth installment of La Casa de Papel (2021).

Netflix struggles to remain the most popular platform

Since then, Netflix It is witnessing a gradual loss of leadership as the most popular platform in the world, which caused alarm among its investors last year with the fall in its share price.

And it is that since 2019, in addition to its traditional competitors HBO and Amazon Prime Video, other services streaming as powerful as Disney+ or Apple TV+.

In fact, the company expected to lose up to two million followers in the second quarter of 2022, resulting in 970,000 unsubscribed accounts.

“There are not enough people on Earth to Netflix will grow to the level that was a few decades ago, but this does not mean that it is no longer relevant,” said Professor Thompson.

So far this year, the company has laid off up to 300 employees and has oriented its medium-term strategy around two main areas: penalizing accounts shared by multiple subscribers in which only one pays for a subscription, and the possible introduction of promotional content. through an inexpensive plan.

However, according to experts, Netflix If you want to stop the bleeding, you should bet on including ads as well as streaming live content.

“However, it will be difficult because they don’t have the kind of useful customer data that other tech giants can use targeted ads,” said media industry researcher David Craig, currently at the University of Southern California. (USC).

Netflix was already broadcasting live some special event, like a festival of comedians”Netflix Is a Joke Fest, but according to industry experts, the future is in sports.

“ESPN+ (Disney+) broadcasts football in the United States and DAZN broadcasts in Europe. This could be one way because the sport attracts many fans who are drawn to the added value of direct content,” Craig said.

Similarly, the researcher pointed to the “possibility” that “acquisition by a major technology or telecommunications company” or “merger with other platforms” could solve the problems Netflix.

Nonetheless, Netflix continues to maintain its privileged position as market leader in streaming worldwide with 220 million subscribers; 20 million more than Amazon, 15 million more than the Disney empire (Disney+, Hulu, Star and ESPN+) and 180 million more than Apple TV+. (EFE)

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