Netflix Corporate History
This article was written by Samuel Phineas Upham
Founded in 1997, Netflix has become a national leader in video streaming and entertainment. It hasn’t been an easy road, but the company has successfully built a streaming service and produces its own content. The two founders, Marc Randolph and Reed Hastings had both worked together at Hastings previous company Pure Software.
Hastings was a math teacher turned software programmer, and then he sold the venture for $700 million. Of that sum, Hastings invested $2.5 million of his own cash to start a rental service for movies. Hastings got the idea after being forced to pay $40 in fines after he returned Apollo 13 well past its due date.
Hastings launched Netflix with 30 employees working under him, and about 925 titles available for rental. In its early days, Netflix was primarily a shipping company that brought rentals to consumers with late fees for single rentals. It launched a subscription service soon after, which the company has built its reputation off of since.
Netflix tried to sell to Blockbuster for $50 million in 2000, but the offer was rejected.
The company went public in 2002, with shares that debuted at $15.
By 2005, Netflix had 35,000 titles in its arsenal, and eventually added a streaming service. By 2007, when the company announced it had shipped its one billionth DVD, DVD orders began to decline. This decline lasted well into 2011 and has caused Netflix to pivot and focus primarily on streaming content.
About the Author: Samuel Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Samuel Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Samuel Phineas Upham on his Facebook page.