Netflix: A Little History

By Louie Wieseman

Since its inception in 1997, Netflix has completely changed the way we view movies and TV shows. Reed Hastings, the co-founder and current CEO of Netflix, founded the company after receiving a massive late-fee bill from Blockbuster. After 17 years, Netflix services single handedly put Blockbuster out of business and created a whole new business of its own. With the streaming abilities released in 2007, Netflix is continuously changing the ways that the TV and movie business is being viewed.

    Netflix was originally created as a DVD rental service that was revolutionary at the time. Customers ordered DVDs via their original site, NetFlix.com, and the company mailed the DVDs directly to them. With week-long rentals for only $6, the company competed successfully with home video rental stores. This business model lead to a bigger business, a larger title selection, and cheaper deals.

In 2007, Netflix launched streaming services for movies and TV shows. While video streaming at the time was only just gaining strength, streaming services in general have been around for a while. Internet streaming debuted in 1993 when the band Severe Tire Damage performed live on the internet. Sports are also no stranger to the origin of streaming, with New York Yankees and Seattle Mariners games streamed via RealNetworks in 1995.

Audio streaming companies like Rhapsody and video streaming sites like YouTube debuted in 2006. Live streaming became more even more common when Netflix, Hulu, Ustream, and Justin.tv announced their video streaming capabilities to the public.

Netflix made their streaming services more accessible, easier, and quicker than illegally pirating and downloading movies. Due to Netflix, most video rental stores went under with Blockbuster being the last to close its doors nationwide this past year. With its revolutionary ways of distributing content, what is next for this groundbreaking service?

Generating original content is the most recent progression. YouTube channels and stars continue to build large markets using original content through web-series, blogs, and other efforts. Netflix’s first original streaming content came out in 2009 with a mini-series called Splatter. In 2012, they went on to create two television series Lilyhammer and The Ropes.

    Other Netflix originals were either stand-up comedy specials or documentaries. Their first hit program, released in early 2013, was the show House of Cards starring Kevin Spacey.

While some TV shows are popular enough to survive a move to another network, like Scrubs’ move from NBC to ABC. However, this isn’t very common and usually means the end of the line for shows since they commonly move to less popular cable channels. Netflix first attempted to utilize their popularity by persuading shows to make the move to Netflix instead of other channels. In early 2013 a show originally produced for Cartoon Network called Problem Solverz became available on Netflix.

Soon talks of other larger and more famous shows moving to Netflix was commonplace.  A new season of Arrested Development, the cult-hit TV originally broadcasted on FOX, was released on Netflix in August of 2012. The new season was met with favorable reviews and Netflix is currently in talks with Mitchell Hurwitz, the creator of Arrested Development, to create another season or a movie.

This success evoked the question: Could streaming media be taken seriously instead of YouTube and Vimeo-like content? The answer was “yes” according the Emmy Awards. In the 2013 Emmy Primetime Awards, three Netflix shows (House of Cards, Arrested Development’s fourth season, and Hemlock) garnered thirteen different nominations, including a win in Outstanding Directing for a Drama Series for House of Cards director David Fincher.

    As the 2014 award season picked up, the Academy Awards and Golden Globes acknowledged Netflix’s original content as well. House of Cards picked up four different nominations including a Best Television Series – Drama nomination. Robin Wright won Best Actress in a Television Series for House of Cards. The Square, an Academy Award nominated documentary about the Egyptian Revolution, was originally released on Netflix. This gives Netflix its first potential Academy Award nominated movie coming from Netflix first instead of theaters.

When House of Cards won a Golden Globe, it became the first ‘webisode’ (an episode of a show made to be shown online exclusively) to win an award at a major award show. Even with the Emmy nominated shows, it creates new discussion on the future value of television, evolving from humble beginnings, to color, to satellite, to digital, and now to online television.

Netflix has always been a powerful force in the media world. It single handedly took down Blockbuster, caused DVD sales to drop drastically, and even aided anti-piracy laws due to its ease of streaming TV shows and movies. It even changed the definition of television to include streaming-exclusive shows. Many major broadcasting companies view Netflix as threatening their revenue. This has sparked debate on whether Hollywood companies should continue their usual practices of business of creating and selling shows and movies, or update their film distribution to fit the new way of business in this digital age.

Netflix accounts for more than 30% of all bandwidth used in the United States. It seems as if major broadcasting companies need to discover ways to compete with Netflix. Why would customers buy DVDs when they could so easily stream the same movies instantly and for a much better price? Especially when streaming sites create quality content nominated for Emmys and Oscars.

After many years, television and movies have met their next greatest challenge: streaming content and original content. Netflix has already changed the business dramatically, only question really is: What’s next for Netflix?