The Rise of Netflix: Part 2

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Welcome back to the Facts For Thought series! Today, we are going to continue exploring the rise of Netflix. In the last episode, we covered the company’s early history, how they found their feet and their success in up to the mid-2000’s. You can watch the video through our YouTube Channel! In this episode, we are going to touch on the expansion of Netflix and how it became the online Streaming platform we know today, dominating the world of video on demand!

But before we dive into this episode, if you are a buyer looking to acquire content for your channel or platform, or you’re a seller looking to get your content out to a global audience, you can get in touch with us through our website (konnect.digital) or you can email us ([email protected]). Without further ado, let’s explore the explosion of Netflix.

The Transition to Streaming

Whilst the mid 2000’s brought much success to Netflix, it’s clear that Hastings had the itch for a change. Netflix has always been known for innovation, being a step ahead of the rest, and with the internet becoming a more prominent force in media consumption, a fresh idea was presented that would change everything. In January of 2007, Netflix began streaming content, online, directly to Tablets, computers and certain TVs through a service they dubbed as “Watch Now”. This brand new service launched with around 1,000 titles available to stream, available for free as part of the monthly $5.99 physical DVD subscription. This concept was heavily inspired by the rapid success of YouTube over the previous 2 years. Furthermore, Netflix celebrated their Billionth delivery in February of that same year.

One year later, in January of 2008, Netflix changed their service plan, granting all rental subscribers free access to unlimited titles online on top of their existing rental plan. This plan only lasted one year though, as in 2009, the company chose to discontinue the service of selling used DVDs following the success of their online streaming service, which overtook the sales of their DVD rental platform. Despite this, they continued to offer a Blu-Ray plan for subscribers. 2010 saw Netflix make numerous successful deals with studios to stream their titles, the first of which being Relativity Media, in July of 2010. The following month, they signed a deal, for just shy of $1 Billion, to stream films from Paramount, Lionsgate and Metro-Goldwyn-Mayer. The latter deal expanded Netflix’s annual spending budget, culminating in a total of roughly $200 Million a year. This is over six times the budget they had the previous year. Toward the end of 2010, Netflix began offering a standalone streaming service completely separate from the physical rental plan.

Whilst Netflix had been making a string of moves that expanded the company's success over the late 2000’s, not all of the ideas Hastings and the crew presented shared this level of success. In 2011, Netflix made a poor business decision, separating their subscription plan into two plans: Netflix (for streaming services), and Quickster (For DVD rentals), both starting at $7.99. Unfortunately, this was catastrophic for the company, as they lost over 800,000 subscribers following this decision. It’s safe to say that it didn’t take long for Hastings to take a step back, reversing the deal less than a month after its launch. Whilst a setback, this didn’t stop Netflix from returning to form, as the company had plans to expand their services internationally, Beginning with the UK and Ireland in January of 2012. This was the company’s chance to take over the world.

Netflix Productions

The next era of innovation for Netflix came in the early months of 2013, when the company would begin releasing films and series produced under the Netflix bracket. The first of these releases was Lilyhammer, shortly followed by house of cards. This was a game changer for the company, as they now had complete control over the production hierarchy, creating, producing and distributing titles in-house. This format would prove to be a huge success for the company, with shows such as Orange is the New Black, BoJack Horseman and many others becoming Netflix’s most watched titles on the platform. Later in 2013, Netflix officially launched in the Netherlands, Marking the platform's 40th country launch. By 2015, this number rose to 50, adding countries such as New Zealand, Australia, France, Belgium among many others. This was nothing compared to what 2016 would bring for the company, though, as Netflix would officially go live in 130 countries simultaneously that year, tripling its global reach from 2015. In 2017, Netflix celebrated a huge milestone, reaching 100 Million subscribers globally.

The mid 2010’s saw Netflix knuckle down on their original productions, bringing some of the most beloved series of the past decode to the public eye. 2016 saw the launch of Stranger Things and The Crown, the former becoming the most watched series after its Season 5 Premiere in 2022. In 2017, Netflix made the bold move to begin producing movies and shows internationally, signing deals with prolific producers and directors, such as Ciro Guerra, Albuquerque Studios and many more.?

The 2020’s saw Netflix continue to achieve worldwide critical acclaim, with the company reaching over 200 Million subscribers in over 190 countries. The platform now contains over 15,000 titles across all its international libraries and earns annual revenues of over $25 billion. Furthermore, Netflix has recently expanded its production resources into such media outlets as video games and books, proving to be moderately successful for the brand. Unfortunately, this upward trajectory of streamlined success was interrupted by a quite surprising turn of events in Q1 2022. The company announced that they had actually lost subscribers, for the first time in over 10 years, having 200,000 less than they did at the end of 2021. With a predicted loss of more subscribers by the end of Q2 2022 and Disney+ catching up to them with total subscribers (currently at over 205 Million, compared to Netflix’s 221 Million), we could potentially see Netflix lose its Number one position as the most subscribed streaming service of all time. To add salt to the wound, Netflix has laid off over 2 percent of its employees globally as of June 2022, as a result of the low subscriber growth and a plan to “trim costs.”?

Not all is bleak in the world of Netflix though, as the Launch of Stranger things 4 has resulted in Netflix’s largest weekend premiere for an original title, with a total of 286.79 million hours viewed. So now the question is, what’s next for Netflix? This is something I’m sure we’re all excited to see in the coming years!

Let’s Konnect!

What do you think of this episode? Let us know in the comments below! As always, you can get in touch with us via our website (konnect.digital) & our email address ([email protected]) for business inquiries. Have a great day!