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How Netflix Came to Be the Red Faced Movie/TV Empire Subscription Service

Updated on September 11, 2017
Netflix Has More Than 104 Million Subscribers, Worldwide, and Amazon Prime (Instant Video Streaming) Has More Than 80 Million Subscribers.
Netflix Has More Than 104 Million Subscribers, Worldwide, and Amazon Prime (Instant Video Streaming) Has More Than 80 Million Subscribers.

Netflix - The Top Subscribed Movie/TV Series Site in the World

Netflix first formed back in 1997 as a competitor for Blockbuster by its founders, two software engineers, Reed Hastings and Marc Rudolph. Their service was only applicable to the use of the internet to rent DVD's, as they did not have stores like Blockbuster, so this would be their gap into the market.

Supposedly, the two founders first got the idea for the online DVD subscription service when Hastings was charged by Blockbuster a late fee of $40 for Apollo13. Rudolph left in 2002.

The physical DVD subscription service, Netflix, began charging a set fee for unlimited DVD movie rentals each month, and this was there competition edge when faced against the Blockbuster giant.

We are now going to go into the brief history for Netflix as the edge their way into the new millennium. The internet is booming, and Netflix is ready to embrace the future.

Our source for the brief history of Netflix is brought to you by CNN Entertainment.

In 2006, the company announced the $1 million "Netflix prize", encouraging people to come up with a better algorithm than its current recommendation system, which was gummed up by divisive movies such as "Napoleon Dynamite". Three years later, the prize is claimed by a seven-man team, though Netflix never used their idea.

In 2007, Netflix moved into streaming. By now subscriptions were on the up and up, moving mountains with each new month and year that would come, and three years later, the service had topped 20 million subscribers.

In 2013, Netflix announced moving into original TV series programming, and this first appeared in the form of "House of Cards", a series about a Washington intrigue produced by David Fincher and Kevin Spacey. It premiered in 2013.

In 2011, it was announced that Netflix were to create a new brand Qwikster for DVD distribution, in an effort to split their DVD and streaming businesses. Within a month, consumer protests prompted the company to drop the idea.

For the 2013 premiered series "House of Cards", Netflix invested $100 million into 2 series of 13 episodes, and the investment paid off as the two series would go on to each earn 13 Emmy nominations. This, in all, increased Netflix's visibility as the world would for the first time see award nominations for TV series that are only accessible online, Netflix being one of these places.

In 2014, we were made way into the financial year and Netflix have more than 50 million subscribers, and its stock price is well over $400 a share, having increased tenfold since 2009.

Link to CNN's - A Brief History of Netflix (published July 21st, 2014)

Netflix's Original Series, "House of Cards", Costs the Company $100 Million to Fund a First and Second Season. The series, 1 and 2, Both Later Go On to Earn 13 Emmy Nominations, Each. Meaning, More Publicity for Netflix.
Netflix's Original Series, "House of Cards", Costs the Company $100 Million to Fund a First and Second Season. The series, 1 and 2, Both Later Go On to Earn 13 Emmy Nominations, Each. Meaning, More Publicity for Netflix.

How Netflix Compares to Amazon Prime's Instant Streaming Service

Netflix

Worldwide subscribers: Reported in second quarter of 2017 to be an estimated 104 million subscribers (51.92 million from the US region alone).

Netflix Has Come Far:

Netflix first started back in 1997 as an online DVD mailing service, operating solely within the US. The service gained popularity through its set fee per month that enabled its subscribers to rent an unlimited amount of DVD's each month.

Netflix's online innovation took things to the next level in 2007 when they launched their streaming service. Over the years that followed the service has risen in worldwide subscriptions in the tens of millions. So much so that in 2014 they had more than half the worldwide subscribers that they have in 2017, a number that rose from 50 million worldwide, to 104 millions subscriptions worldwide.

Netflix has kept there streaming service at the centre of the competition, as they constantly spend hundreds of millions on improving the content that they have available to users, in hopes of making way into once again doubling their number of subscriptions.

Netflix remains a prominent brand in the US and Europe, and they have put a lot of their focus and energy into Brazil, Mexico, Canada and the UK. In Brazil alone Netflix aims to have 24 million subscriptions, something which is a monumental achievement for the brand.

Netflix remains the streaming service that offers the best and most current content, as they have gone to great extents to bring original material to the small screens. In 2013, Netflix premiered their first ever original series that cannot be watched anywhere else on the internet, including "House of Cards", "Orange is the New Black", and "Lilyhammer".

Lilyhammer is a show that in actual fact released a tad earlier than the others, in 2012, but did not see substantial viewership until 2013, the time when Netflix Originals were gaining media and major audiences attention.

Netflix Are $20 Billion In Debt:

There was a chat recently on Netflix being in debt for a missive $20 billion, and if you would like to hear more about this then why not check out WatchMojo.com's video addressing the subject in - Netflix is $20 Billion in Debt - The CineFiles Ep.32.

Basically, Netflix has been spending big in recent years on improving their Netflix streaming service, with a large amount of money being spent on their Original TV shows - uniquely being shown on Netflix, and nowhere else around the web.

Another large expenditure that Netflix incurs comes from their deals with large movie studios like Disney's Marvel given that there are marvel series streaming on Netflix, as well as a whole ton of Marvel blockbuster movies. Something tells us there are some contractual right for Netflix to have solo airings for these Original shows, and this probably costs big bucks on Netflix's end of the deals.

The rest of the lost money coming out of Netflix's business accounts will be going on international marketing, website maintenance/servers/security/marketing/etc., and payments to ensure exclusivity on certain franchise deals with Netflix. We covered Marvel, but there will be many other contracts drawn up between Netflix and movie studios just like this.

Netflix will not be sweating about/or losing any sleep when considering the financial state of Netflix's brand because they have their highest record account of worldwide subscribers that stands at more than 100 million in hard numbers. Their original TV series are making front page news around the web, winning Emmy nominations left, right, and centre. And, Netflix have got the brand appeal that gives them worldwide prosperity and investment opportunities.

Amazon Prime's Instant Video Streaming Service

Subscribers: Amazon reportedly has 80 million subscribers as of 2017.

Amazon Prime Replaces LoveFilm:

Amazon Prime was seen by Amazon's company as being a much better business model for the UK and Europe where LoveFilm (Amazon's subsidiary) was operating as a DVD rental service (online by mail service) and online streaming service. The online streaming service, LoveFilm was folded into Amazon Prime's Instant Video service in February of 2014.

However, the LoveFilm DVD rental service would still function online throughout the UK and European regions until it was announced in 2017 that on October 31st, 2017 they would be closing the service down. This comes after a record low number of sales for the declining DVD rental market, online.

Amazon Prime Instant Video Streaming Service:

Amazon Prime is a business model that first solely found its operation in the US, until 2014 when LoveFilm closed its online streaming doors in the UK and Europe, opening up new space for Amazon Prime postal service (and instant video streaming service) to start its operations worldwide.

Amazon Prime is essentially a service that provides its users a set fee each month, and in return they receive the instant movie/TV series streaming service, and free delivery on all purchases through the Amazon.com/.co.uk website.

The upside to having an Amazon Prime subscription, is that for regular Amazon online shoppers there is the chance to save a fair amount of money on shipping fees, and for the added value of receiving instant access to their online movie/TV series streaming service. Many have opted for the instant streaming package, and in return receive more from the Amazon company in terms of temptations to use their website more often.

Amazon Prime Instant Video Streaming is quite the mouthful, and many would simply refer to this service as Amazon Prime, so we will too. But, keep in mind that we are referring in most to the instant streaming service through their app/website.

Amazon Prime have got a competing level of subscriptions to that of Netflix, and the battle wages on between the two biggest instant streaming success stories from around the world, that between Netflix and Amazon Prime.

Amazon Prime Cannot Compete with Netflix's Original TV Series:

There is bound to be a weakest link when it comes down to the two biggest online streaming services, Netflix and Amazon Prime.

And, where on Netflix there is quite simply fantastic TV series Originals that provides hours after hours of entertainment, Amazon Prime can just not compete as they offer lacklustre TV entertainment, that in most is mediocre at best.

The reality where Amazon Prime stands is that they simply do not invest enough equity into Original TV series, and in return their service seems like it has little to offer when stood besides their major competition, Netflix and cable TV.

Amazon Prime Have Too Much Trash Content:

This was a similar problem when Amazon Prime's streaming service was under the control of LoveFilm, in that they upload way too many poor quality movie content. Since it leaves a bad taste in the minds of the users, and makes for a much worse experience when scrolling through their library of movies.

Amazon Prime even has a worse (than Netflix) user interface that remains their biggest challenge when appealing to wider audiences aside from their Amazon website company, as if a user interface does not feel comforting and fun for the user, they simply will not attract the groups of people with high standards.

Prime works well as a business model, but how does it compare to Netflix's more seasoned content. Netflix has better Original TV series, a fact proven by the countless Emmy's that their shows have been nominated for, and Netflix has far fewer trash movies.

Amazon Prime will have posters/banners/TV adverts promoting their minority good TV series, and blockbuster movie listings, but in the end they just cannot keep up with Netflix's content. This is why Amazon Prime try effortlessly by throwing as many mediocre TV shows and movies as they can into their selection hoping it will reel in millions of new subscribers, when in reality half of these movies and TV shows are not even watchable.

Whose Service is the Best, Netflix or Amazon Prime?:

Netflix is the winner in the eyes of us, the consumers, the customers, the critics, the award ceremonies, and anyone who has flat out compared the two services head to head.

In the realm of movie/TV series online streaming the audiences are growing as the search for new binge movie franchises and TV series increases, the levels of subscriptions of Netflix and Amazon Prime will continue to soar through the sky.

If Hollywood is anything to go by, they would likely choose Netflix over Amazon Prime, most prominently because the bigger end of the money that they will receive is from Netflix's entity for instant streaming online.

If the movie/TV series critics are anything to go by, then they will most likely side with Netflix because of all of the awards that their Original Netflix TV shows have been nominated for.

And, in our opinion, Netflix uses better, functions better, offers better variety of movie/TV series content, and it all feels a little bit greener on this side of the fence. Assuming Netflix was a garden, and Amazon Prime were the neighbouring garden, the grass would also be greener on Netflix's garden.

How Do You Feel About Netflix Now? Utterly Proud of Netflix's Competence, or Bitterly Disappointed As You Feel Their Direction Was Not for You. Let Us Know Down in the Comments.
How Do You Feel About Netflix Now? Utterly Proud of Netflix's Competence, or Bitterly Disappointed As You Feel Their Direction Was Not for You. Let Us Know Down in the Comments.

Netflix and Amazon Prime Wars!

Whose Your No.1 Source for Movie/TV Series Instant Streaming?

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