Sometimes the most legendary stories stem from the most banal events. This is the case of Netflix, the basic idea for which came to Reed Hasting after he was charged a $40 fine for returning the famous film “Apollo 13” late. Just for the record, today the US streaming company’s capitalisation on the New York stock exchange exceeded 50 billion.
From the fine to foundation
Reed Hasting is a computer engineer with a degree from Stanford University who, after having sold his previous software company and been charged the now famous fine, in 1997 decided to found Netflix as a DVD, VHS and video games hire postal service. The boom took place as soon as Mr Hasting introduced the limitless monthly formula, today we define as a “flat rate”: up to 3 titles could be chosen, they were then sent by post, to be returned in order to receive others, even several times during any given month. All for the cost of $6.
2007, the year of the revolution
February 2007 marked the start of Netflix’s annus mirabilis. After having sent out his billionth DVD, Mr Hastings flanked the postal service with a video streaming platform. Using the same subscription, again without limits, and again for the same price as before. It was an immediate success, well beyond the most optimistic forecasts.
House of Cards and today’s content strategy
In 2011, Netflix decided to enter the world of the production of original contents. David Fincher, who directed Fight Club, was chosen to tell the behind-the-scenes tale of the politics at the White House. In view of the clamour that ensued, the various Golden Globes won and the income deriving from the contents sales, Mr Hasting decided to stay one step ahead of the game – once again – and thus launched the production company, Netflix Originals.
What the Netflix story teaches us
Netflix has reinvented itself at least three times in a history of less than twenty years. Differently to Blockbuster, to which Netflix offered itself in 2000 for less than 50 million dollars. Fifteen years later, Mr Hasting’s evolving company has almost a hundred million subscribers across the globe, whilst the granitic Blockbuster has gone bankrupt.