Netflix was founded in 1997 as a DVD rental service sent through the mail. It has since expanded to become the largest internet television network, offering streaming to over 44 million subscribers in 41 countries. Originally competing with video rental stores, Netflix now competes with cable providers and streaming services. Their long term goal is for internet television to replace linear TV worldwide through their expanding catalog of original and licensed content available on any internet-connected screen.

1. B Y : V I E WI N G I N N O V A T O R S
NETFLIX: A CASE STUDY

2. IDEATION
• Netflix was founded by Reed Hastings and Marc
Randolph in 1997
• Netflix is the most popular Internet TV provider
• Their services are available in 41 countries
• They have a customer base of 44 million people
• And they watch over 1 billion hours of content through
Netflix every month.

3. LAUNCH
• Launched on August 29, 1997
• Originally, Netflix was a company that rented DVD
movies by mail.
• Soon they began offering streaming services
• In 2010, Canadians were able to access Netflix
• Netflix’s international reach continues to grow

4. ORIGINAL STRATEGIES
• Customers would receive DVDs in the mail
• For $4 and a $2 postage fee the customer would receive a
DVD for 7 days
• The rental price would go down if more DVDs were rented
• Customers could buy DVDs for up to 30% off their original
price
• They wanted to offer reviews of movies for customers
• Movie preferences were generated for the customer
based off previous rentals

5. WHY WAS NETFLIX STARTED?
• Video rental stores did not have a large selection of
DVDs in 1997
• Hastings was fed up with late fees
• He paid a $40 late fee for Apollo 13

6. COMPETITION
• In the beginning:
• Video rental stores
• Presently:
• Cable providers
• HBO
• Hulu
• YouTube

7. WHAT ARE NETFLIX'S PLANS FOR THE
FUTURE?
• According to Netflix’s website this is their long-term
view:
• “Over the coming decades and across the world, Internet
TV will replace linear TV. Apps will replace channels, remote
controls will disappear, and screens will proliferate. As
Internet TV grows from millions to billions, Netflix is leading
the way.”

8. REVENUE
• Revenue stream: subscription service
• Their recent addition of original content has
increased their subscriber base, which in turn has
created more revenue.

9. THE BOTTOM LINE
• Netflix’s business plan has proven to be very
successful
• Netflix has introduced the fad of binge viewing
• Created original content:
• House of Cards
• Orange is the New Black
• Netflix is beginning to impact TV networks
• TV networks are beginning to lose their customers’ interest
• Netflix will continue to change the way we watch
our favorite shows and movies.