How Netflix Began
Netflix was established in 1997 by Reed Hastings and Marc Randolph as a DVD-by-mail service. The concept was inspired when Hastings was charged a late fee for a movie rental, prompting the idea for a subscription-based model where customers could receive DVDs through the mail. Over time, the company transitioned into streaming, growing to serve millions of subscribers worldwide.
The History of Netflix
In this first installment of our multi-part blog series on Netflix, we explore its origins and remarkable evolution over the past two decades. Initially launched as a personalized, web-based platform for movie recommendations and rentals, Netflix gradually transformed into a streaming giant. The company’s steadfast dedication to digital content has positioned it as the leading name in the streaming video industry. More importantly, this commitment has allowed Netflix to maintain its dominance, expanding its reach globally and consistently attracting a growing international audience.
Founded in 1998 by Reed Hastings and Marc Randolph, Netflix’s origins are deeply intertwined with the dot-com bubble—a period when online businesses focused on selling consumer goods directly through their domains. Amidst the excitement surrounding internet-driven commerce, companies like Pets.com, WebVan, and Kozmo.com secured venture capital funding to offer goods directly to consumers. However, due to flawed business models that incurred losses on every sale, these companies quickly depleted their resources. Ultimately, the dot-com bubble burst, leading to widespread failures.
In September 1999, Reed Hastings introduced a subscription-based business model for Netflix. Although the company remained unprofitable until the mid-2000s, it successfully navigated the challenges of the dot-com bubble. Netflix provided DVDs through the US Postal Service and hosted its catalog online, allowing the company to concentrate on its core strength: offering a curated and personalized collection of films.
What set Netflix apart was its web-based catalog. Unlike traditional video rental stores, the primary way for customers to access Netflix’s library was online. This ensured that users across the entire country could browse the company’s complete collection, unrestricted by the limited inventory of local stores. Furthermore, this online access allowed customers to conveniently explore and select films from the comfort of their homes.
Netflix’s Subscription-Based Business Model
In its early days, Netflix faced two major challenges in its business model. The first was the delay caused by mailing DVDs to subscribers, with delivery times ranging from one to four days. While many customers were willing to try Netflix, repeat rentals were less common due to this inconvenience. The second challenge was the high demand for new releases. To recover the cost of purchasing a DVD for rental, the company needed each disc to generate 15-20 rentals, which proved difficult.
Two pivotal elements of Netflix’s business model emerged in response to these issues. The company adopted a recurring-revenue approach—the subscription model—which significantly boosted the rate of repeat rentals. By subscribing to the platform, customers were more likely to continue renting. Netflix also introduced a queue system, enabling users to pre-select the movies they wanted to watch next. This streamlined the process of receiving another DVD immediately after returning the previous one and eliminated late fees. Customers were motivated to return DVDs simply to access their next selection, addressing the retention problem effectively.
To maximize the use of its DVD library, Netflix developed its Cinematch movie recommendation system. This tool suggested titles for subscribers, reducing the reliance on new releases and promoting a more balanced utilization of the catalog. Over time, Cinematch became increasingly advanced, shaping the customer experience and influencing the company’s decisions on acquiring new content.
Netflix’s approach to these challenges highlighted its management’s commitment to creating a sustainable business model rather than prioritizing rapid growth. Instead of amassing a vast content library, the company focused on optimizing its DVD-by-mail service using its existing collection. This strategic decision was instrumental in helping Netflix survive the dot-com bubble crash.
Barry McCarthy, Netflix’s CFO from its inception until 2010, reflected on Reed Hastings’ foresight regarding the subscription model in an industry dominated by retail video rentals. Speaking to the Unofficial Stanford Blog, he remarked:
“It was Reed’s insight that the subscription model would resonate with consumers in a compelling way. He re-engineered the website and software to support a subscription model… we began to grow exponentially overnight. In 1998, I think the business did $1 million in revenue. In 1999, we did $5 million, then $35 million, $75 million, $150 million, and then almost $300 million… It took us about five years to reach $500 million and another three years to hit $1 billion—all because of the subscription model.”
Netflix’s subscription model gained further momentum in February 2000 with the launch of its Unlimited Movie Rental program. For $19.95 per month, customers could rent unlimited movies, receiving up to four DVDs at a time. To foster subscriber loyalty and goodwill, the company eliminated all per-movie charges, shipping fees, and late fees. By this time, Neil Hunt, Netflix’s technical lead, had also rolled out Cinematch, a recommendation system designed to enhance the user experience.
Netflix’s content curation was overseen by Ted Sarandos, who joined the company in 2000 as Chief Content Officer. With prior experience in movie and television distribution, Sarandos played a crucial role in shaping Netflix’s content strategy. He initially contributed to Cinematch and later became a driving force behind the company’s original content initiative, Netflix Originals.
Competition with Blockbuster
Netflix’s business model and vision for the movie rental industry stood in stark contrast to that of its main competitor, Blockbuster. Blockbuster’s CEO, John Antioco, believed video rentals were inherently spontaneous, with customers preferring to visit stores, pick up copies instantly, and watch them without delay, rather than waiting days for DVDs delivered by mail.
During the early days of its rental program, Netflix was operating at a loss. Reed Hastings approached John Antioco in Dallas with a proposal: Netflix would sell a 49% stake to Blockbuster for $50 million. In return, Netflix would manage Blockbuster’s online platform, Blockbuster.com, complementing its physical rental business. However, Blockbuster rejected the offer, deeming Netflix unprofitable and of little strategic value. This short-sighted decision contrasted sharply with Netflix’s commitment to a long-term vision, ultimately leading to vastly different outcomes for the two companies.
Netflix disrupted the traditional retail video rental model by mailing DVDs directly to customers through the US Postal Service. Unlike Blockbuster, which relied heavily on late fees as a significant revenue stream, Netflix eliminated late fees entirely. Instead, customers were incentivized to return DVDs promptly to receive the next item in their queue. Key differentiators for Netflix were its online ordering system and lack of physical stores, as well as its policy of not charging late fees. Blockbuster’s inability to compete on these fronts ensured Netflix’s rise as a dominant player in the home entertainment market.
Netflix went public on March 24, 2002, raising $82.5 million in its initial public offering (IPO). Although the company was still unprofitable at the time, recording a $4 million loss on $30.5 million in revenue, this marked a significant improvement compared to prior years, which saw a $38.6 million loss on $75.9 million in revenue.
In 2004, Blockbuster made a belated entry into the online DVD rental market and eliminated late fees. However, these changes increased operational costs and reduced revenue, leading activist shareholders, led by Carl Icahn, to pressure the CEO to abandon the strategy. As a result, Blockbuster’s online initiative lost momentum, and late fees were reinstated.
Blockbuster’s dominance in the market was achieved during a period when 80% of its shares were owned by Viacom. That same year, Blockbuster invested $200 million into its online platform and eliminated late fees, a decision projected to result in an additional $200 million revenue loss. However, Viacom, viewing this approach as misaligned with its vision, chose to exit the company. Blockbuster’s inability to adapt its business model to technological advancements presented a significant challenge for the once-dominant market leader.
Meanwhile, Netflix, as a nimble startup, continued to experience rapid growth in both revenue and subscriber numbers. By the 2010s, Netflix had expanded exponentially as streaming video technology matured. Blockbuster, in contrast, faced internal resistance from its new shareholders after Viacom’s departure. These shareholders pushed to reinstate late fees and reduce investment in the online business. Blockbuster’s delayed entry into the online market, coupled with its failure to secure shareholder support for an aggressive digital strategy, ultimately led to its downfall in the face of technological disruption.
Netflix Launches Video on Demand
Netflix intensified competition in January 2007 by introducing its streaming service, Watch Now. At the time, this service primarily targeted advanced users with broadband internet, which was not yet widespread. Streaming required at least a 1 Mbps internet connection, with a 3 Mbps connection necessary for DVD-quality playback. Subscribers on the $17.99 plan could access 18 hours of streaming content. Delivery relied on a special browser applet that subscribers needed to install. By 2008, Netflix expanded access to unlimited video streaming for users of its highest-tier plan.
“We named our company Netflix in 1998 because we believed Internet-based movie rental represented the future, first as a means of improving service and selection, and then as a means of movie delivery,” said CEO Reed Hastings at the time. “While mainstream consumer adoption of online movie watching will take a number of years due to content and technology hurdles, the time is right for Netflix to take the first step.”
Initially, around 1,000 titles were available for streaming, compared to the 70,000 offered through its DVD mail-order service. Although digital delivery had always been part of Hastings’ long-term vision, the streaming service launched as an add-on to the DVD subscription model, primarily to reduce subscriber churn. At the end of Q4 2006, Netflix reported a net margin of 4.9%, with $12.7 million in net income from $255 million in revenue. Despite these earnings, the company faced a churn rate exceeding 4% per quarter.
The launch of streaming video in 2007 marked a turning point for Netflix, as it surpassed $1 billion in annual revenue for the first time. Over the year, Netflix saw an 18% increase in its subscriber base, a 21% rise in revenue, and a 36% growth in net income compared to 2006. The boost in revenue offset the higher costs associated with its streaming initiative and strong competition, enabling the company to achieve greater profitability.
Netflix adopted a phased approach to rolling out its streaming service. Instead of making it available to all users simultaneously, the company scaled the service gradually, completing the rollout by June 2007. In hindsight, this deliberate pace allowed Netflix to optimize its video delivery infrastructure, particularly for the cloud, avoiding downtime and performance issues that often plague more rushed launches.
By prioritizing the development of a robust technical foundation, Netflix preserved its first-mover advantage. While many technology pioneers lose their edge to competitors who refine the solution, Netflix leveraged its strong content and technical teams to maintain a lasting competitive advantage since the launch of its streaming service.
Netflix employs DRM (Digital Rights Management) encryption to safeguard its content, with its DRM system recognized as one of the most secure anti-piracy measures for premium video. The company uses H.264 high-profile and VP9 video codecs to ensure smooth streaming and broad accessibility for its users.
Partnership with Hardware Platforms
As Netflix worked on building its streaming video solution, it also explored ways to stream video through hardware platforms. In 2004-2005, the company considered collaborating with contract manufacturers to create DVD disc drives with integrated video processors capable of downloading video content from the internet for TV streaming. This concept, similar to TiVo’s TV recording system, was ultimately abandoned as Netflix redirected resources toward competing with Blockbuster in an intense pricing war.
In 2008, Netflix began developing a dedicated device for streaming video. The team started work on a player that could connect to televisions and stream content via the internet. However, Reed Hastings worried that having their own platform might hinder partnerships with consumer electronics companies. To avoid alienating potential collaborators, Netflix decided to spin off the player development team into a separate company, which later became Roku.
Throughout its history, Netflix has faced challenges from various sectors, including cable TV providers and movie studios, whose business models it disrupted through content licensing. Similarly, partnering with device manufacturers posed a risk, as Netflix’s early streaming efforts could be perceived as competitive. To mitigate this threat and preserve its partnership opportunities, Netflix chose to separate its player development team entirely.
Netflix soon partnered with Microsoft to create a streaming video app for the Xbox gaming console. This collaboration allowed Netflix to develop a native app for the Xbox 360, giving Xbox Live Gold members access to Netflix on their televisions through the console. For Netflix, this partnership opened access to Xbox’s 12 million Live members, while Microsoft gained a valuable selling point for its gaming platform. As part of the deal, Netflix agreed to make its streaming video technology exclusive to Xbox for one year.
Afterward, Netflix developed a Blu-ray disc-based streaming solution for Sony’s PlayStation. The company also generalized the software platform initially built for DVD players, creating software development kits (SDKs) to enable Netflix integration across various devices. As smart TVs became more prevalent and internet-based streaming gained traction, Netflix was well-positioned to offer seamless integrations, ensuring its readiness for the future of streaming technology.
In August 2008, Netflix experienced a significant database corruption that halted DVD shipments for three days. This incident prompted the company to migrate its business logic to the cloud. The migration occurred primarily between 2010 and 2011, culminating in 2015 when Netflix transitioned its billing infrastructure—the most critical component of its operations—to the cloud. This complete move to the cloud was groundbreaking in the tech industry, enabling Netflix to build a robust infrastructure capable of seamlessly scaling with its exponential growth and global expansion to over 190 countries.
First Major Content Licensing Deal
A pivotal moment in Netflix’s history came in 2008 when the company secured its first significant content licensing agreement with the cable TV channel Starz. For $30 million annually, Netflix gained access to Starz’s library of 2,500 movies and TV shows, including titles from Disney and Sony Pictures. This deal was transformative for Netflix, allowing its streaming service to offer subscribers a diverse selection of high-quality content. Starz, likely viewing streaming as a niche market at the time, underestimated the deal’s potential to impact its Pay-TV offerings.
By 2011, Starz terminated its licensing agreement with Netflix, despite the latter offering $300 million to renew the deal. Starz’s CEO later publicly referred to the original agreement as a significant misstep for the company.
Netflix and the Culture of Binge-Watching
Netflix soon began securing content licensing deals with television studios. For these studios, income from Netflix’s streaming service complemented revenues from other regional licensing agreements. Initially, studios limited Netflix’s access to previous seasons of TV shows, believing that making recently aired or ongoing episodes available on streaming platforms would reduce viewership on cable networks, their primary revenue source. However, Netflix later disrupted this model by licensing original content, transforming itself into a significant revenue stream for television studios.
As Netflix’s audience grew, content providers realized that the platform could help build viewership for their shows. By making earlier seasons of TV series available, cable networks enabled content discovery, driving more viewers to current episodes. This approach significantly boosted ratings for shows like Breaking Bad and Mad Men, both produced by AMC. For instance, Breaking Bad saw its ratings for Season 5 more than double those of Season 1, largely due to the audience Netflix helped generate. The platform allowed viewers to catch up on past episodes, giving networks the confidence to invest in quality programming, knowing that even small initial audiences could grow significantly over time.
Shortly before the final season of Breaking Bad aired, the show’s creator, Vince Gilligan, credited Netflix for its role in building the show’s popularity:
“Under the old paradigm—using the old technology of simply having first runs and then reruns on networks—I don’t know that we would’ve reached the critical mass that we reached.”
For television studios, revenue is primarily generated through the initial broadcast of a series and by syndicating the show to other networks after a season or the series concludes. In this landscape, Netflix emerged as an additional revenue stream for studios. Moreover, as demonstrated by shows like Breaking Bad and Mad Men, Netflix played a crucial role in expanding audiences for high-quality content through what is now referred to as “catch-up TV.”
One significant challenge for Netflix has been credential sharing, where users share their account passwords with others. To address this, Netflix has gradually introduced measures to combat the issue. As part of its crackdown on password sharing, Netflix has begun displaying prompts to users it suspects of accessing the platform through borrowed accounts.
Original Programming
In 2011, Netflix initiated its strategy to stand out from competitors by allocating resources for original programming. This effort culminated in the release of its first original series, House of Cards, in 2013. Netflix Originals quickly became a cornerstone of the company’s business model, enabling it to reduce reliance on external movie and television studios. This shift provided Netflix with greater control over its content supply chain while fostering audience loyalty. The success of Netflix’s original content strategy inspired other OTT platforms, such as Amazon Prime Video and India-based Hotstar, to invest in their own original programming to broaden their appeal.
Netflix’s licensing decisions are guided by its advanced content recommendation systems. These analytics-driven systems evaluate various factors, including the popularity of a genre, the appeal of actors and directors, and user engagement with similar content. Unlike traditional models that depend on immediate ticket sales, Netflix measures the success of a series by how much it is watched and its ability to cultivate a dedicated audience.
The company’s first original license, House of Cards, was a data-driven decision. Netflix analyzed the number of subscribers who rented the UK version of House of Cards, watched political dramas like The West Wing, or showed preferences for David Fincher’s direction and Kevin Spacey’s acting. Seeing significant overlap in these audiences, Netflix greenlit two seasons of the series, investing $100 million. This bold move, led by content head Ted Sarandos, was based on the belief that Netflix’s network effects would generate enough publicity and viewership, even if the show initially attracted a niche following. Netflix’s content strategy revolves around catering to diverse interest groups, defined broadly and often crossing traditional categories.
In 2015, Netflix signed a six-film deal with Adam Sandler. The first film, The Ridiculous 6, received harsh reviews from critics but performed well on the platform due to strong viewership. Sarandos defended the investment, emphasizing its value for subscribers who enjoy Sandler’s work. However, Netflix has also faced failures in its original programming, with series like Marco Polo and The Get Down being canceled due to insufficient audience engagement.
The original content strategy is crucial as Netflix continues its global expansion. Penetrating international markets requires content tailored to local tastes, making region-specific originals an essential part of the company’s growth strategy.
Spinning Out DVD and Online Streaming
In 2011, Netflix implemented significant changes to its business model to fund further investments in its video catalog. The company separated memberships for its DVD rental and online streaming services, requiring users to purchase separate subscriptions. Customers who opted for both services saw their monthly costs rise from $10 for a combined plan to $8 for each service, totaling $16. Additionally, Netflix proposed spinning off its DVD rental business as a standalone entity called Qwikster. However, the abrupt price hike led to backlash, with 800,000 subscribers leaving the service, forcing Netflix to partially reverse its decision.
While the price increase remained, Netflix ultimately abandoned plans to spin off the DVD business. CEO Reed Hastings reaffirmed his belief that the future of home entertainment lay in online streaming but acknowledged a failure in effectively communicating the changes to customers. Although the move caused a public relations setback, it proved to be a temporary issue as Netflix’s exponential growth resumed. Moreover, the price hike strengthened the company’s financial position, providing a solid foundation for its future endeavors.
Netflix Streaming vs. DVD Subscription
Netflix has revolutionized the entertainment industry, transforming how we watch movies and TV shows. Today, its focus is primarily on streaming, but how does this differ from its DVD rental service?
Netflix streaming is now the cornerstone of the company’s offerings. It’s a subscription-based service that provides instant access to a vast library of movies and TV shows, which can be streamed on devices such as computers, phones, tablets, or TVs. Unlike DVDs, there’s no waiting for mail deliveries, and viewers can watch as much or as little as they like at any time.
In contrast, DVDs are physical discs that can be rented from Netflix or other outlets. Watching them requires a DVD player, and playback is limited to one device at a time. Additionally, on average, DVDs tend to be more expensive than streaming subscriptions, which is an important consideration for potential users.
So, which option is better? It depends on individual preferences. DVDs may appeal to those who prioritize watching commercial-free TV shows and movies and don’t mind waiting a few days for new releases. On the other hand, streaming is ideal for those who want immediate access to a wide selection of content and the flexibility to watch anytime, anywhere.
Domestic Growth in the US and International Expansion
Netflix’s technological innovations have allowed the company to account for over 30% of peak internet traffic in North America while maintaining a minimal impact on the broader internet infrastructure. Advances in video encoding and content delivery have ensured that users enjoy high-quality streaming without disrupting other online services.
In January 2016, Netflix represented 37.1% of traffic on North America’s fixed networks, which declined to 35.2% by June 2016 due to the company’s improved encoding efficiencies. By adopting per-title encoding optimization, Netflix replaced a generic encoding approach with tailored bitrates for individual titles. This resulted in up to a 20% reduction in bitrates for some content while delivering superior video quality, enhancing the viewing experience for customers.
To optimize video delivery, Netflix has collaborated with internet service providers (ISPs) to reduce data transfer over the broader internet backbone. The Open Connect content delivery network (CDN) facilitates settlement-free peering with most ISPs and allows local caching of Netflix content via Open Connect Appliances. This approach ensures that streaming traffic remains within the ISP’s network, significantly improving efficiency and reducing strain on external infrastructure.
Meanwhile, Netflix’s business logic, customer data, and content catalog operate on cloud services hosted by Amazon Web Services (AWS). The company utilizes three AWS regions—Oregon (US-west-2), North Virginia (US-east-1), and North California (US-west-1)—to maintain service reliability. This architecture ensures uninterrupted operations even in the event of an AWS region outage. Since its migration to AWS, Netflix has consistently achieved a 99.99% uptime.
In January 2016, Netflix launched its streaming service globally, expanding to 190 countries. The company’s cloud infrastructure scaled effectively to meet the demands of global internet traffic, with China remaining the only major exception in Netflix’s international footprint.
From the Dot-Com Bubble to Baring FANGs
Netflix’s rise is emblematic of the internet-driven transformation that has shaped modern industries. The company is part of the FANGs—a term coined by US finance expert Jim Cramer in 2013 to describe the tech giants Facebook, Amazon, Netflix, and Google. While Netflix remains smaller in scale compared to its FANG peers, this grouping underscores how, over two decades, Netflix has captured a significant share of attention among the global internet audience.
These tech giants have flourished as the internet has become increasingly central to daily life. The widespread adoption of mobile phones has made internet access ubiquitous, making it a dominant force in shaping global culture for younger generations. Companies like Google and Amazon have laid the foundation for innovation by offering Platform-as-a-Service (PaaS) solutions, simplifying technological complexities, and empowering software developers to create consumer-facing products. Without this maturing technical infrastructure and the growing popularity of the internet, Netflix’s trajectory would have been markedly different.
Amid declining investor sentiment toward tech companies in 2016, Netflix stood out as one of the few to maintain steady stock performance, reflecting investor confidence in its revenue model. Throughout its history, Netflix has consistently been ahead of the curve. Its decisions to offer an online film catalog, introduce an unlimited movie subscription model, launch streaming services, and invest in original content have established its dominant market position.
By the early 2010s, Netflix recognized that its technological edge was no longer sufficient for maintaining a competitive advantage. The company shifted its focus to directly challenge the incumbent cable television industry by investing in high-quality, original content. While Netflix has reached saturation in the US market, its future growth depends on successful international expansion. The challenge lies in finding the right content strategy to appeal to diverse global audiences.
Expansion into International Productions and New Ventures (2017–2020)
Netflix significantly expanded its international and creative footprint between 2017 and 2020. In November 2017, the company announced its first original Colombian series, executive-produced by Ciro Guerra. By December, Netflix secured a four-year deal with Stranger Things director-producer Shawn Levy and his company, 21 Laps Entertainment. That year, Netflix also heavily invested in stand-up comedy, featuring specials from comedians such as Dave Chappelle, Louis C.K., Chris Rock, Jim Gaffigan, Bill Burr, and Jerry Seinfeld.
In February 2018, Netflix acquired The Cloverfield Paradox from Paramount Pictures for $50 million, releasing it immediately after Super Bowl LII. This surprise launch made the film instantly profitable for Paramount and underscored Netflix’s ability to innovate in distribution. Netflix also secured international rights for films like Paramount’s Annihilation and Universal’s News of the World.
In March 2018, Netflix ordered the racing docuseries Formula 1: Drive to Survive. Around the same time, Sky UK integrated Netflix into its pay-TV service. In April, Netflix withdrew from the Cannes Film Festival due to a rule requiring competition films to be released in French theaters, a fallout from the 2017 premiere of Okja. The company continued producing non-traditional international hits such as Germany’s Dark, Mexico’s Ingobernable, and Brazil’s 3%.
In May 2018, Barack and Michelle Obama signed a deal to produce content for Netflix under Higher Ground Productions. In June, Netflix partnered with Telltale Games to adapt adventure games for streaming, launching Minecraft: Story Mode in November. That July, Netflix earned 112 Emmy nominations, the most of any network, and signed five-year deals with creators Harlan Coben and Alex Hirsch. In October, Netflix acquired Albuquerque Studios, marking its first U.S. production hub.
By November 2018, Netflix and Paramount Pictures entered a multi-film agreement. In December, Netflix partnered with ESPN Films to co-produce The Last Dance, a documentary on Michael Jordan and the 1997–98 Chicago Bulls season.
In January 2019, Netflix debuted the popular series Sex Education, joined the Motion Picture Association of America, and signed an exclusive deal with Intrepid Pictures. In May, they partnered with Dark Horse Entertainment to develop TV series and films. In July, Netflix opened a hub at Shepperton Studios and signed a deal with Game of Thrones creators David Benioff and D.B. Weiss. By September, Netflix renewed Stranger Things for a fourth season and signed an overall deal with The Duffer Brothers.
In November 2019, Netflix and Nickelodeon entered a multi-year partnership to produce original animated films and series. That same month, Netflix secured a long-term lease for Manhattan’s historic Paris Theatre.
In 2020, Netflix continued its aggressive expansion. In January, they announced a four-film deal with Adam Sandler. By February, they partnered with Japanese creators to produce original anime. In March, they unveiled plans for spin-off films from SpongeBob SquarePants and signed a multi-year deal with Peter Chernin’s Chernin Entertainment. In May, Netflix acquired Grauman’s Egyptian Theatre for special events. In July, Ted Sarandos was named co-CEO, and Netflix invested in Black Mirror creators’ production company Broke and Bones.
In September 2020, Netflix signed a lucrative deal with the Duke and Duchess of Sussex. By December, they secured a first-look deal with Stranger Things star Millie Bobby Brown.
Expansion into Gaming, New Programs, and Initiatives (2021–2022)
In 2021, Netflix achieved remarkable milestones in awards and new ventures. In March, the company earned 36 Academy Award nominations, winning seven, and tied the record for most Emmy wins in a single year with 44 awards. In April, Netflix secured a U.S. pay television rights agreement with Sony Pictures Entertainment and expanded globally by opening a Canadian headquarters in Toronto, as well as offices in Sweden, Rome, and Istanbul.
By June, Netflix launched an online store for curated merchandise and inked a deal with Steven Spielberg’s Amblin Partners. They appointed Mike Verdu to spearhead their gaming division and announced plans to launch mobile games by 2022. In July, Netflix signed first-look agreements with Joey King and Zack Snyder.
By August, Netflix Originals accounted for 40% of its U.S. library. The company announced “TUDUM: A Netflix Global Fan Event,” which garnered 25.7 million views. The following month, Squid Game became Netflix’s most-watched series, attracting over 111 million viewers within its first 28 days.
In October, Netflix partnered with Starbucks to launch the Netflix Book Club and shifted its viewership metrics to track hours watched, including rewatches. By November, Netflix released mobile games for Android and iOS, acquired visual effects studio Scanline VFX, and signed a deal with writer Roberto Patino.
December 2021 marked further expansions. Netflix introduced “Tudum,” a companion website for fans, and signed agreements with Spike Lee and Kalinda Vazquez. They also announced plans to invest in original French films and series.
In January 2022, Netflix expanded its portfolio of sports docuseries and unveiled plans to acquire game developer Next Games to bolster its gaming initiative. They partnered with Dr. Seuss Enterprises to create new series and specials and extended their lease with Martini Film Studios to support content production.
By Zukhrakhon Mansurova
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