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By
Suzanne
From mail order DVD Service to
influential entertainment
(this was a
Power Point Presentation I wrote for my class "Trends in
Media.")
In The Beginning
Netflix was started
in 1997 by 2 Software Millionaires,
Marc
Randolph and
Reed
Hastings
The company was launched in April 14, 1998 with only 925
different DVD’s that you could rent over the Internet for a
small fee. In 1999, they started the subscription
membership.
Business took off after that. They had their first
initial public offering (IPO) on May 29, 2002 and became
very rich. 2003 was their first profitable year.
Personal Observation: I was an early member in the late
1990’s!
I used to be a member of their DVD service and watched lots
of movies and TV shows, but then I had so many programs that
I recorded onto VHS and then DVD, that I never had time to
watch the Netflix DVD’s. They literally gathered dust on my
shelf; so after saving my Netflix queue, in 2010 I canceled
my membership. Later, in 2014, I signed on to the
streaming service. I use it semi-regularly.
First, a little history…
Videotapes were developed in
the 1950’s for commercial usage,
but the first home VCR was sold by SONY in 1976. Their
Betamax tapes and machines were very expensive, so few
homes had them. Later, JVC developed the VHS (Video
Home System) VCR, which was much cheaper (although not
as good quality), and they won the “videotape
wars.” Most homes in the U.S. still did not have
VCR’s until the late 80’s.
In the 1990’s, DVD’s (Digital
Video Disks) came out and quickly started to replace
VHS tapes. VHS
tapes were flimsier (broke easily) and took up a lot of
space. Also, you had to rewind and fast-forward the
tapes to get from one spot to another.
VHS died by 2004.
History continued…
Since CD’s (Compact Disks)
were already replacing records and tapes, DVD’s were
easy for consumers to understand and handle (they look
virtually the same). Also, home computers and the
Internet started getting more popular in the late 90’s,
making it even easier for consumers to be familiar with
the digital format.
Once
Netflix took off, they quickly moved to subscription
format so that people could pay a small monthly fee and
no longer have to worry about paying any late fees for
DVD’s that they didn’t return right away.
Netflix Ad
Netflix developed their own
streaming Internet,
moving away from DVD’s, in 2007.
Netflix Commercial (2005)
Netflix in the early 2000’s and beyond
They developed and maintain an extensive personalized
video-recommendation system (algorithm)
based on ratings and reviews by their customers.
There was a period of adjustment where sales fell,
in
2011, but the company kept growing anyway
By September 2014,
Netflix had subscribers in over 40 countries, with
intentions of expanding their services in unreached
countries.
They started developing original movies and tv shows
in 2006.
Their first original TV show was the hour-long
political drama
House of Cards, which debuted in February 2013.
First Season Promo New
Season 4 Promo
Orange Is the New Black (also in 2013) was their
most successful show thus far.
First Season Promo
More Netflix Original TV Shows
 Marvel Action Shows
They produce live action superhero-focused series' from Marvel:
Daredevil, Jessica
Jones, Iron
Fist and Luke Cage.
They will all unite in a mini-series called
The Defenders.
Other Original shows
BoJack Horseman
(2014)
Marco Polo
(2014)
Sense8 (2015)
Bloodline
(2015)
Narcos (2015)
Master of None
(2015)
Unbreakable
Kimmy Schmidt (2015)
Grace and Frankie
(2015)
Stranger
Things (2016)
The Get Down
(2016)
Travelers (2017)
Lemony Snicket’s A Series
of Unfortunate Events (2017)
13 Reasons Why (2017)
Other Netflix Endeavors
Beyond original TV
Netflix first developed its original movie content with Red
Envelope Entertainment. They made many independent films but then
closed it down in 2008 so they could partner with other movie companies and
not compete with them.
In 2011, they decided to separate the mail order DVD service from the
streaming service, and add video games, to a new service called
Qwikster. They decided
to cancel that project the same year.
In 2012, they formed a
political
action committee (PAC) called FLIXPAC.
In 2013, they hosted their own awards ceremony,
The Flixies.
In 2016, they started blocking
virtual
private networks, or VPNs, so that
people in other countries could not watch Netflix illegally. (A VPN
hides your IP address) This was for copyright as well as business purposes.
In November, Netflix announced that
subscribers can download shows and movies to watch offline at no extra
cost.
How Netflix is different
PROS
CONS
Netflix Revives favorite tv
shows
Netflix has produced episodes of several
shows that were previously canceled and have found new
audiences on Netflix. These include:
Arrested development
Full House (now
Fuller House)
Gilmore Girls
Lilyhammer
The
Killing
Longmire
Star Wars: The Clone Wars
Developments
Netflix has deals with many
studios and companies
Netflix is now available on many devices, including
Blu-ray Disc
players, tablet
computers, mobile
phones,
high-definition television (HDTV) receivers,
home theater
systems, set-top boxes,
and video game
consoles.
Netflix holds rights to back-catalog titles to films from among other
distributors, Warner Bros., Universal Pictures,
Sony
Pictures Entertainment, 20th Century Fox, and Walt Disney Studios; and
also holds current and back-catalog rights to television programs under
license by
Disney–ABC Television Group,
DreamWorks
Classics,
Kino
International,
Warner Bros.
Television, 20th
Television,
Hasbro Studios,
Saban Brands
and CBS
Television Distribution. The streaming service also held current and
back-catalog rights to television programs distributed by
NBCUniversal
Television Distribution,
20th
Century Fox Television,
Sony
Pictures Television, as well as select shows from Warner Bros.
Television
Some deals fall through
Epix signed a
deal with Netflix but then after 2 years moved to Amazon.
Starz had a
deal until 2012.
Netflix also previously held the rights to select titles from vintage
re-distributor
The
Criterion Collection, but were pulled from the streaming library when
Criterion titles were added to
Hulu's library.
Customers complain when some
titles are no longer available
Netflix’s deal with Disney does not include films released after 2015,
so they will not be streaming the new Star Wars movies any time soon.
Netflix has fewer TV shows and movies than it used to have
As they make more original shows and movies, they’re moving away from what
made them successful into new territory.
Can Netflix survive in this new world it’s created?
Future of Netflix
Netflix successes
From VHS to DVD to Netflix and beyond, TV viewers can now watch “On
Demand” instead of just at the time when TV networks or movie
theaters want to let them watch. Netflix is partly responsible for that.
Despite the warnings that traditional TV networks can’t keep making
original programming without having as many viewers,
Netflix seems to be disproving that argument as well as
adding to the demise of broadcast TV.
The
FCC keeps broadcast TV from having profanity and nudity; it doesn’t
monitor cable TV, nor Internet companies such as Netflix; they can make
whatever programming they want, without having to worry about any kind
of censorship or even sponsors (for the most part). Netflix is able to
have shows for all ages and backgrounds.
DVD’s
will soon be as scarce as VHS tapes. They still make and sell them,
but digital content is definitely the wave of the future.
A 1 Terabyte hard drive can hold 500 movies. This won’t affect
Netflix that much, since they have streaming and downloadable programs
as well as original content. They no longer rely on DVD’s.
Netflix’
main online competitors are Amazon and HULU, both of which have
catalogs of older shows and movies, subscription services and original
programming.
Netflix announced at the
Consumer Electronics Show in January 2016 that it had become
available everywhere worldwide outside of
Mainland China,
Syria,
North Korea and
the territory of Crimea.
 Netflix
released an estimated 126 original series or films in 2016, more
than any other network or cable channel.
Netflix Influence on Culture
The rise of Netflix has affected the way audiences watch televised content.
Netflix's CPO Neil Hunt believes that
Netflix is a model for what television will look like in 2025. No pilot
or cliffhangers are needed, unlike previous TV network shows. Viewers can
binge-watch
(which has become a common slang term).
The company’s unlimited time for shows means that
TV creators no longer have to have seasons or other traditional formats.
According to a
2013 Nielsen survey, more than 60% of Americans said they binge-watch
shows and nearly eight out of 10 Americans have used technology to watch
their favorite shows on their own schedule.
In 2009, someone on Twitter used the phrase “Netflix
and Chill.” It was an ordinary phrase, just “Netflix &
Chill” until, for some reason, in 2014, it took on a sexual meaning. It was
put into more widespread usage as a sexual metaphor in 2015.
Many people have canceled their cable/satellite TV service and only watch on
their phones, tablets, computers or other devices. They are called
Cord
Cutters.
NETFLIX MEDIA PR AND SOCIAL MEDIA
Netflix has a good Media and PR site;
most of the site can be seen publicly, but like most TV media/PR sites,
there is exclusive content for press-only that requires a log-in.
Also like most TV networks, Netflix and its shows are promoted all over the
Web with advertising, and on
TV with commercials,
and on social media: Facebook,
Twitter,
Instagram,
Pinterest,
Tumblr, and
YouTube.
Until a few years ago, Netflix did no traditional advertising, but now
they do.
However, it’s unconventional, but award-winning.
The only thing it seems to be lacking is that it doesn’t send out long press
releases for each of its shows, nor does it have screeners for all press.
Each show is handled by different PR teams and the press must contact each
team separately. However, each TV network does their PR and
advertising differently.
 A
Netflix doesn’t have a target audience. They don’t care about
demographics like age, gender or nationality. They only care about your
interests. They group viewers into clusters of common tastes.
Unlike most other companies,
their employees get unlimited vacations and high pay, get expenses paid for
easily and don’t have performance reviews. They have to perform very
well or else they’re fired, but with generous severance package. They have a
culture of “freedom and responsibility” as outlined in their
Netflix culture
deck.
Conclusions
Netflix started at a crucial time in Internet commerce. Netflix founders were savvy businessmen who’d already done well with
software sales. Through a combination of good business practices, great deals with
other companies, and excellent employee treatment, they’ve built a
profitable business that keeps growing. They’re always innovative and forward-thinking. Netflix values customer loyalty, recommendations and feedback to help
them build. Despite a few setbacks, they’ve managed to build a world-wide,
successful business that, with any luck, will continue to be profitable
and successful for decades to come. The only possible roadblock is that technology, laws, and public tastes
constantly change. However, they seem ready for any challenge.
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Before the 1980’s,
