Netflix – The Modern Theater

All about Netflix
Written by Rimsha Saqib

With the shift of worlds towards technology, everyone favors a platform where they can watch their favorite shows while sitting in their comfy house setting. One of the platforms is Netflix.  

It is an online platform in which you can watch your favorite shows and web series according to your genre of interest. 

Now, let’s look at Netflix’s core culture and leadership. Netflix’s culture was built on two major aspects – responsibility and freedom. Netflix’s culture is quite unusual and different from those of other giants. 

The company urges its employees to develop resilience in the workplace. This is due to consistent competition faced by Netflix by other giant companies. Netflix seeks ideas and support from its employees, providing them with a platform to deliver performance based on their ideas and creativity. 

This helps motivate the employees to work harder and brainstorm much more. The idea of personal ideas from employees helps Netflix stand affirm in the competitive field with Apple, Amazon, Walmart, Disney, YouTube and HBO as its major competitors. 

The following are the main traits that characterize Netflix’s corporate culture:

  • Independent decision-making (Autonomy)
  • Open, broad, and deliberate information sharing (Communication)
  • Extraordinary candidness (Attitude)
  • Focus on high effectiveness (Productivity and Effectiveness)
  • Rule avoidance (Rules and Organizational Rigidity) 

Hastings believes in receiving employee feedback anywhere, at any time, which provides the staff with an easy work environment. Moreover, he also respects the employees’ needs and pays them more than they expect from him. This motivates the employees to perform even better. 

Furthermore, he does not limit his staff to his ideas and urges them to develop their own to help the company prosper. Finally, he believes in the concept of ‘Sunshine’ your failure. He does not judge the employees based on their failure; rather, he encourages them to learn from their mistakes and perform better. 

How it Started

Netflix was originally founded in Scotts Valley, California, in the year 1997. It was initially a paid rent-by-mail DVD service. The users of Netflix would have to order their desired DVDs and order them at their homes using the website. 

Once completed with the DVD, it was sent back to the store. The rentals had caused them $4 per DVD with an added $2 postal charge. After some time, Netflix switched its system to a subscriber-based model where the customers could keep the DVDs for as long as they liked and rent a new movie once the previous DVD had been returned. 

Netflix producers also considered and rejected VHS cassettes and settled with DVDs. Netflix launched in April 1998 as one of the world’s first online DVD rental companies. Initially, Netflix only had a limited working staff. 

Many of you wonder what Netflix stands for and what was the idea behind its name. Well, Netflix is a combination of “Net”, which is a word for “Internet”, and “Flix”, which is a short variation for “Flick”, which means a movie/film. 

In the year 1999, Netflix debuted a subscription service for the public and offered DVDs at affordable prices. Netflix gained a membership count of 600,000 in the USA and made its first public (on the Nasdaq, under the ticker “NFLX”) in 2002. 

The initial offer of the stock was $15 per share, with a cumulative offering of 5,500,000 shares. Since then, Netflix has become one of the best performers in the S&P 500. Then in 2003, Netflix reached a milestone of 1 million accounts. 

In 2004, Netflix issued a patent with the U.S. Patent and Trademark Office for its subscription rental service, with a few more extensions and reached a user base of more than 2 million. Later in 2005, Netflix members increased to 4.2 million. 

Then in 2007, a streaming service called “Watch Now” was introduced by Netflix that allowed members to watch movies on their gadgets and by the end of the year, its membership rose to 7.5 million. 

In 2008, Netflix extended its partnership with electronic companies, and the year ended with a total of 9.4 million subscribers. 

In 2009, Netflix was added to PlayStation and Smart-TVs. Later, by the end of 2010, Netflix had reached a customer base of 20 million after expanding its services to Canada. 

After a successful international extension, Netflix planned to further expand its services to Europe and the Nordic countries by 2012 and reached a whopping subscription of 40 million. 

Hasting was under the influence that building a DVD business would eventually take him a step closer to streaming media. In the early years of 2001, Hasting used to spend around $100 million on streaming research. 

He started testing the streaming videos and kept discarding the options that were not feasible. Once he started gaining hold of the streaming, he approached several content providers, worked with them and also considered several streaming pricing models for the public. 

The innovative strategy that Netflix’s CEO Reed Hastings used is disruptive innovation and was introduced by Clayton Christensen in 1995. Clayton elaborates how smaller companies with few personnel and resources can succeed much more than those that are larger and better equipped. 

Clayton has criticized the larger companies by pointing out that they tend to incline their focus more towards acquiring new customers. This, in turn, ends up unfruitful for the company. This is because, in search of new customers and revenue-generating techniques, the companies seem to overlook potential customers of that company.

Netflix Vs Blockbuster

Blockbuster was initially doing better than Netflix and was a video rental chain that had stocked the latest movies providing worldwide services. However, most of its earnings came from its “late-return fees” rather than the rentals themselves. 

This method got Blockbuster to earn $800 million in 2000. However, little did they know that this led to customer dissatisfaction.

Netflix, on the contrary, offered its customers unlimited rentals for a monthly subscription and collected no late fees. Reed Hastings knew how Blockbuster was gaining unpopularity amongst the public because of its late fees collection. 

However, it was not just the ‘no late fee’ rule that gained Netflix popularity. They also offered a greater catalog of films and a variety of genres. Later, Blockbuster tried to launch its digital download service but was struck by a failure. Netflix had already gained enough customer base, eventually leading to Blockbuster’s failure as a giant. 

Netflix surpassed 200 million subscribers in 2020, another milestone that cements Netflix as the world’s greatest streaming video service.

Its usage has been growing ever since it started streaming; however, the growth was gradual as for any business under normal conditions. 

So what happened that led to such a great increase in subscribers in just 2020? The Netflix Team has used the current coronavirus pandemic. They offered so much more to the devastating public that they are told to isolate themselves within their homes’ boundaries. 

To gain public interest, Netflix has planned on carrying out the following steps:

  • Introducing a new original movie every week: In 2021, Netflix isn’t holding back. It plans to release at least one new original movie every week of the year. 
  • More Foreign Language TV Shows: According to a study, the subscriber surge that Netflix had in 2020 was mainly from subscribers from outside the USA and Canada. They were mostly from Europe, the Middle East, and Asia. 
  • A Shuffle Play Feature: Netflix has released a feature of shuffle play to help the dilemma whilst wanting to watch a movie or a T.V. series. People often go with the option they are given in shuffle play and sometimes like a genre they had never seen or enjoyed before. 


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Rimsha Saqib

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