Megan, Sydney, Chris
Netflix, an online DVD and streaming service, has transformed industry of video streaming, the way viewers watch movies in the present day. The company first started out in 1997 by Reed Hastings and Marc Randolph who co-founded Netflix together. In 1998, Netflix launched its first DVD rental and sales site, Netflix.com. In 1999, they introduced the flat fee for unlimited DVD rentals on a monthly basis. In 2000, they introduced personalized movie recommendations, and then in 2007 online streaming began, and allowed users to stream on personal computers. From 2009-2010, the ability to stream Netflix from all internet connected began. Netflix then from 2011-2015 spread to all different parts of the country starting out with the Caribbean, and moving all the way to Australia, Europe, and Japan. Then finally in 2016, Netflix became available worldwide. Over time, Netflix added new features such as being able to buy more screens available to stream at one time for an increased price every month, the ability to download movies onto your devices so users can watch without internet connection, and Netflix has even come out with their own Netflix original shows such as Orange is The New Black, House of Cards, or Stranger Things. Netflix currently has approximately 93 million subscribers worldwide, and more than 49 million are in the United States.
The evolution of Netflix has transformed the way people around the world now watch television and movies. Before services such as Netflix and Redbox were invented, Blockbuster was the service most people around the country used to rent movies. Over time, Netflix was one of the main causes for the downfall and bankruptcy of the company. Netflix did not single handedly take down Blockbuster, but the combination of online streaming services such as Netflix, Hulu or Amazon all fostered the slow downfall of the company. Netflix evolved with new and innovative ways to keep its customers intrigued in its services by coming up with personalized recommendations for users based on what they have already watched. Blockbuster eventually went out of business due to the less demand for their services, and a higher demand for more accessible services such as Netflix, which has transformed the industry of movie streaming.
It was an interesting way how Netflix came to be. When CEO Reed Hastings returned an VHL tape and was charged for a $40.00 late fee, he came up with an innovative idea of a movie rental mail service. CD’s were not well known in 1997 but Reed Hastings went and mailed 24 cd’s to himself and they came back in perfect condition. Soon after the company had been started. At first the company worked more like a blockbuster because it did not have subscription based customers. But this way of receiving DVD’s was not very successful so the company went on a limb with the idea of subscriptions. After the first month of free trials, the company saw a 90% renewal rate. In the recent past Netflix and other online entertainment subscribers have left companies like Blockbuster in the dust and bankrupt.
Web 2.0 services and applications make possible more dynamic interactions between clients and servers, more engaging webpage displays and applications and ultimately more direct, interactive and participative user-to-user interactions than heretofore experienced on the web. Netflix is a great example of a Web 2.0 service because of its changing evolution, talked about in the first two paragraphs. All the time Netflix is changing its website structure, primarily to maximize user efficiency. For example, recently Netflix has changed the way to scroll through movies on its website and it now offers a service where you can download shows or movies to watch when not connected to Wi-Fi. Also Netflix now has movie preferences that are specifically tailored to show the user TV shows or movies they might like.
Before the emergence of Netflix, blockbuster dominated the rental movie and gaming sphere. Blockbuster had its own store where people could walk in and rent videos and gained its popularity in the late nineties and early 2000s. Eventually, Blockbusters around the country shut down because mail rentals, such as Netflix took over. Now consumers can rent videos and receive them within days in the mail without having to go to the blockbuster store. Later came On Demand, where consumers could rent movies and record their favorite Television shows through their TV providers. Finally Netflix changed their format, where consumers could now pay a monthly fee and receive seasons of shows and movies without those pesky commercials. Teenagers and young adults were some of the early users of Netflix because they could watch their favorite shows on their computers, iPhone, and even through their Xbox or PlayStation. In some senses Netflix replaced cable for some people, because some people would rather pay the smaller fee for Netflix than the idea of cable TV. In today’s current society, most people do not watch live TV because they do not have time, or refuse to waste their time watching the advertisements. Instead, they turn to Netflix because they can watch it on multiple devices and multiple people can watch at the sane time. Culturally, most family’s and friends do not sit to watch shows anymore, but rather watch them on their own or through Netflix. According to a Huffington Post article, more than 40% of all households have an internet subscription to Netflix, Hulu or Amazon (36% have Netflix). In another study, researchers found the number of video subscriptions to some of the major TV providers dropped over 1.2 million in 2014. Now more and more TV providers must find a way to compete with these online streaming companies in order to acquire more consumers. Therefore, economically TV providers are losing money (and have to spend more money on streaming devices) and Netflix is gaining more popularity and profit.
Because large TV providers are losing money to these companies, Netflix supports the Net Neutrality act enacted in 2015. Supporters of the act claim the laws prevent ISP’s from engaging in potentially anticompetitive practices such as, charging certain websites for faster speeds within their networks, which gives them the technical advantage. Internet companies, like Netflix and Google, support the act as well as other smaller companies. However in recent news, Trump’s FCC boss, Ajit Pai, plans to undo the net neutrality acts. Therefore ISP’s could start charging companies more for each standard video and essentially hike the price for consumers.