In 1997, two men sitting in a carpool between Santa Cruz and Sunnyvale conceived a business model that would eventually dismantle the video rental industry. Reed Hastings, a computer scientist and mathematician who had recently sold his company Pure Software for $750 million, and Marc Randolph, a marketing director, decided to test a radical idea: mailing compact discs to customers. They mailed a single disc to Hastings's home to verify that the concept worked, and the arrival of the intact package confirmed their vision. This simple test launched Netflix, which began with 30 employees and 925 titles, operating in a $16 billion home video market dominated by physical stores. Hastings invested $2.5 million of his own money to start the venture, and the company quickly grew to offer hundreds of thousands of DVDs, a scale impossible for any physical retail store. The founders rejected selling VHS tapes because they were too expensive to stock and too delicate to ship, but DVDs were the perfect medium for their long-tail business model. Early on, Netflix offered a per-rental model, but by September 1999, they introduced a monthly subscription concept that eliminated late fees and due dates. This shift was so successful that the company secretly slowed deliveries to heavy users, whom they called pigs, to discourage them from returning DVDs too quickly. The dot-com bubble burst in 2000, and Netflix faced significant losses, leading Hastings and Randolph to offer to sell the company to Blockbuster for $50 million. Blockbuster CEO John Antioco laughed off the offer, calling the dot-com hysteria overblown, a decision that would later be cited as a fatal error. By 2002, Netflix went public on NASDAQ at $15.00 per share, and by 2003, the company posted its first profit of $6.5 million. The DVD rental service became a cultural phenomenon, shipping 1 million DVDs every day by 2005, and the company filed a patent infringement lawsuit against Blockbuster in 2006, alleging that the rival's online service violated Netflix's dynamic queue patents. The dispute settled in 2007, but the damage to Blockbuster's reputation was already done, and the company's debt load and internal disagreements eventually led to its collapse.
The Streaming Pivot
The transition from physical mail to digital streaming was not immediate, but it was inevitable. Reed Hastings had told Mynette Louie in the late 1990s that his goal was always streaming media, and that Netflix rented DVDs only to grow its customer base for streaming. By 2005, data speeds and bandwidth costs had improved sufficiently to allow customers to download movies from the internet, and Netflix had acquired movie rights and designed a hardware device called the Netflix box. However, the company scrapped the hardware concept after witnessing the popularity of YouTube, which succeeded despite lacking high-definition content. In January 2007, Netflix launched its streaming media service, introducing video on demand via the internet with only 1,000 films available compared to 70,000 on DVD. The service, then called Watch Now, required Internet Explorer on a computer, and Hollywood studios licensed second-run content to the service without expecting it to threaten their existing lucrative relationships with cable television. By February 2007, Netflix delivered its billionth DVD, a copy of Babel to a customer in Texas, marking a milestone in the company's history. In April 2007, Netflix recruited ReplayTV founder Anthony Wood to build a Netflix Player that would allow streaming content to be played directly on a television rather than a desktop or laptop. Hastings eventually shut down the project to encourage other hardware manufacturers to include built-in Netflix support, which would be spun off as the digital media player product Roku. In January 2008, all rental-disc subscribers became entitled to unlimited streaming at no additional cost, a change that came in response to the introduction of Hulu and Apple's new video-rental services. The company's database was corrupted in August 2008, leading to a three-day outage, which prompted Netflix to move all its data to the Amazon Web Services cloud. By 2009, Netflix streams overtook DVD shipments, and the company began offering subscribers rentals on Blu-ray while discontinuing its sale of used DVDs. In 2010, Netflix signed a deal to stream 300 indie movie titles and expanded its deal with Warner Bros. Television to include shows like Veronica Mars and Nip/Tuck. The company reached a five-year deal worth nearly $1 billion to stream films from Paramount, Lionsgate, and Metro-Goldwyn-Mayer, increasing its annual spending fees by roughly $200 million per year. Netflix launched in Canada in September 2010, its first international market, and began offering a standalone streaming service separate from DVD rentals in November 2010. The company's expansion continued into Latin America in September 2011, and in January 2012, Netflix launched in Europe, starting with the United Kingdom and Ireland. By 2016, Netflix rebranded its DVD-by-mail service under the name DVD.com, A Netflix Company, and the company had expanded to 40 territories.
Netflix's transformation from a content distributor to a content creator began in 2011, when the company made a straight-to-series order from MRC for the political drama House of Cards, led by Kevin Spacey. This marked the first instance of a first-run television series being specifically commissioned by a streaming service, and Netflix executives said that its customers' love of films by Spacey and show director David Fincher caused the company to acquire the show. The company's customers' tendency to binge watch many episodes without stopping caused it to release all 13 episodes of the show's first season at the same time, a strategy that would become a hallmark of Netflix's approach to television. In November 2011, Netflix added two more significant productions to its roster: the comedy-drama Orange Is the New Black, adapted from Piper Kerman's memoir, and a new season of the previously cancelled Fox sitcom Arrested Development. House of Cards was released by Netflix on the 1st of February 2013, marketed as the first Netflix Original production, and later that month, Netflix announced an agreement with DreamWorks Animation to commission children's television series based on its properties. The company's original programming strategy continued to evolve, and in 2013, Netflix added a Facebook sharing feature, letting United States subscribers access Watched by your friends and Friends' Favorites by agreeing to modify the Video Privacy Protection Act. In November 2013, Marvel Television and ABC Studios announced that Netflix had ordered a slate of four television series based on the Marvel Comics characters Daredevil, Jessica Jones, Iron Fist, and Luke Cage. Each of the four series received an initial order of 13 episodes, and Netflix also ordered a Defenders miniseries that would tie them together. Daredevil and Jessica Jones premiered in 2015, and the Luke Cage series premiered on the 30th of September 2016, followed by Iron Fist on the 17th of March 2017, and The Defenders on the 18th of August 2017. The company's original programming output ballooned to a level unmatched by any television network or streaming service, with Netflix producing 240 new original shows and movies in 2018, and 371 in 2019, a figure greater than the number of original series that the entire U.S. TV industry released in 2005. The Netflix budget allocated to production increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a figure that once again overshadowed any of its competitors. By 2022, Netflix Original productions accounted for half of its library in the United States, and the company had ventured into other categories, such as video game publishing of mobile games through its flagship service.
Global Expansion and Cultural Impact
Netflix's expansion into international markets was rapid and strategic, with the company launching in Canada in September 2010, its first international market, and expanding to Latin America in September 2011. In January 2012, Netflix launched in Europe, starting with the United Kingdom and Ireland, and by 2016, the company had expanded to 40 territories. In January 2016, at the Consumer Electronics Show, Netflix announced a major international expansion of the service into 130 additional countries, making it available worldwide except China, Syria, North Korea, Kosovo, and Crimea. As part of this expansion, Netflix officially launched its services in Africa, with a focus on South Africa, Kenya, and Nigeria, and between 2018 and 2020, Netflix had started making significant investments in African storytelling, hiring Dorothy Ghettuba, a Kenyan media entrepreneur, as head of African Originals. The company had invested the equivalent of €160 million in film content production in Africa since it began working on the continent in 2016, with over 12,000 jobs created across Nigeria, Kenya, and South Africa. Netflix's global expansion also included partnerships with local creators, such as the Obamas' Higher Ground Productions, which signed a deal to produce docu-series, documentaries, and features for Netflix in May 2018. The company's international content strategy continued to evolve, with Netflix investing in distributing exclusive stand-up comedy specials from Dave Chappelle, Louis C.K., Chris Rock, Jim Gaffigan, Bill Burr, and Jerry Seinfeld in 2017. In 2018, Netflix acquired the rights to The Cloverfield Paradox from Paramount Pictures for $50 million and launched on its service on the 4th of February 2018, shortly after airing its first trailer during Super Bowl LII. The company's international expansion also included partnerships with local creators, such as the Obamas' Higher Ground Productions, which signed a deal to produce docu-series, documentaries, and features for Netflix in May 2018. Netflix's global expansion also included partnerships with local creators, such as the Obamas' Higher Ground Productions, which signed a deal to produce docu-series, documentaries, and features for Netflix in May 2018. The company's international content strategy continued to evolve, with Netflix investing in distributing exclusive stand-up comedy specials from Dave Chappelle, Louis C.K., Chris Rock, Jim Gaffigan, Bill Burr, and Jerry Seinfeld in 2017. In 2018, Netflix acquired the rights to The Cloverfield Paradox from Paramount Pictures for $50 million and launched on its service on the 4th of February 2018, shortly after airing its first trailer during Super Bowl LII. The company's international expansion also included partnerships with local creators, such as the Obamas' Higher Ground Productions, which signed a deal to produce docu-series, documentaries, and features for Netflix in May 2018.
The Streaming Wars and Gaming
The streaming wars intensified in the 2020s, with Netflix facing competition from Disney+, HBO Max, and other platforms. In 2021, Netflix earned the most Academy Award nominations of any studio, with 36, and won seven Academy Awards, which was the most by any studio. Later that year, Netflix also won more Emmys than any other network or studio with 44 wins, tying the record for most Emmys won in a single year set by CBS in 1974. The company's original programming output continued to grow, with Netflix producing 240 new original shows and movies in 2018, and 371 in 2019, a figure greater than the number of original series that the entire U.S. TV industry released in 2005. The Netflix budget allocated to production increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a figure that once again overshadowed any of its competitors. In 2021, Netflix also ventured into video game publishing, hiring Mike Verdu, a former executive from Electronic Arts and Facebook, as vice president of game development, along with plans to add video games by 2022. Netflix announced plans to release mobile games that would be included in subscribers' service plans, and trial offerings were first launched for Netflix users in Poland in August 2021, offering premium mobile games based on Stranger Things including Stranger Things 3: The Game, for free to subscribers through the Netflix mobile app. The company officially launched mobile games on the 2nd of November 2021, for Android users around the world, and the collection launched for iOS on November 9. Some games in the collection require an active internet connection to play, while others will be available offline, and Netflix Kids' accounts will not have games available. The company's gaming strategy continued to evolve, with Netflix acquiring Night School Studio, an independent video game developer, on the 28th of September 2021, and Next Games, a mobile game developer, in March 2022 for €65 million. The company also acquired Boss Fight Entertainment, a Texas-based mobile game developer, for an undisclosed sum, and announced plans to acquire Australian animation studio Animal Logic in July 2022. Netflix's gaming expansion was part of a broader strategy to diversify its content offerings, and the company had invested heavily in original programming, with Netflix producing 240 new original shows and movies in 2018, and 371 in 2019, a figure greater than the number of original series that the entire U.S. TV industry released in 2005. The Netflix budget allocated to production increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a figure that once again overshadowed any of its competitors.
The Co-CEO Era and Live Events
In January 2023, Greg Peters and Ted Sarandos were named co-CEOs of Netflix, with Hastings assuming the role of executive chairman. Peters previously served as COO and Chief Product Officer, while Sarandos served as Chief Content Officer. The company's leadership structure changed again in 2023, with Eunice Kim promoted to Chief Product Officer and Elizabeth Stone promoted to Chief Technology Officer in October 2023. In April 2023, Netflix announced that it would discontinue its DVD-by-mail service on September 29, and users of the service were able to keep the DVDs that they had received. Over its lifetime, the service had sent out over 5 billion shipments. The company's focus shifted to live events and sports, with Netflix announcing a major agreement with professional wrestling promotion WWE in January 2024, under which it would acquire the international rights to its live weekly program Raw beginning the 6th of January 2025. The rights would initially cover the United States, Canada, the United Kingdom, and Latin America, and expand to other territories over time. The agreement was reported to be valued at $500 million per year over ten years. In February 2024, Netflix joined with Peter Morgan, creator of the Netflix series The Crown, to produce the play Patriots on Broadway, and the venture was the first Broadway credit for the company but not its first stage project. The company was actively involved as a producer of Stranger Things: The First Shadow in London, and both productions shared a lead producer, Sonia Friedman. In May 2024, the company hosted its second Netflix Is a Joke festival in Los Angeles, and streamed several specials from the festival live, including Katt Williams's Woke Folk and The Roast of Tom Brady, both of which ranked on Netflix's global top 10 the following two weeks. That same month, Netflix announced that it would stream both National Football League Christmas games in 2024, and for 2025 and 2026, the streamer would have exclusive rights to at least one NFL Christmas game each year. In June 2024, Netflix announced that it would develop new entertainment venues known as Netflix House at King of Prussia Mall in Pennsylvania and Galleria Dallas in Texas, and the spaces would feature retail shops, restaurants, and other interactive experiences related to Netflix original content. Netflix House Philadelphia would feature immersive experiences for Wednesday and One Piece, while Netflix House Dallas would feature Stranger Things: Escape the Dark and Squid Game: Survive the Trials, and Netflix House Las Vegas Strip would open in 2027. In November 2024, Netflix announced that it would discontinue further work on interactive specials and remove all but four of them from the platform, citing a desire to focus on technological efforts in other areas. On the 15th of November 2024, Netflix streamed a boxing event from AT&T Stadium in Arlington, Texas, featuring as co-main events an exhibition match between Jake Paul and Mike Tyson, and Katie Taylor vs. Amanda Serrano for the WBA, WBC, IBF, WBO, and The Ring lightweight titles. While afflicted by technical issues, Paul's promoter reported that the stream had a peak concurrent viewership of 65 million viewers, surpassing the 2023 ICC Men's Cricket World Cup final, which had a reported 57 million concurrent streams on Disney+ Hotstar, as the most live-streamed sporting event. Netflix stated that the event had an average minute audience of 108 million worldwide, and that the AMA of 47 million in the United States made the Taylor vs. Serrano bout the most-watched women's professional sporting event in U.S. history. On the 20th of December 2024, FIFA announced that Netflix would be the exclusive U.S. broadcaster of the 2027 and 2031 FIFA Women's World Cup, in what was deemed the platform's most significant push into sports content. On the 25th of December 2024, Netflix aired its first-ever NFL games, the Kansas City Chiefs versus the Pittsburgh Steelers, and the Baltimore Ravens versus the Houston Texans, and the games both averaged over 30 million global viewers and became the two most-streamed NFL games in US history, while simultaneously creating Netflix's most-watched Christmas Day ever in the US.
The Warner Bros. Acquisition
In October 2025, Netflix, Inc. was reported to be actively exploring a bid for the studios and streaming assets of Warner Bros. Discovery, and the company retained investment bank Moelis & Co. to evaluate a potential offer. Netflix had been granted access to Warner Bros. Discovery's financial data room as part of its preparatory due-diligence, and the acquisition would give Netflix control over major IP such as DC Comics and rights to the Harry Potter franchise, along with HBO's premium dramas, as well as Warner Bros.' distribution rights of several foreign-produced movies such as Under Parallel Skies and Ex Ex Lovers, which were already available on Netflix prior to these acquisition deals. Netflix stressed that it remained predominantly focused on growing organically and was not interested in owning legacy linear television networks such as CNN, TBS, and TNT. On the 4th of December 2025, Netflix won the bidding war for Warner Bros. Discovery, to be followed by exclusive talks to finalize a deal. On December 5, Netflix announced that they would be buying the Warner Bros. assets for $72 billion, valuing the entirety of Warner Bros. Discovery at $82.7 billion. The deal would include the Warner Bros. film, television, and video game studios, HBO/HBO Max and their respective libraries, DC Entertainment/DC Studios, and WBD's distribution and licensing divisions. It would exclude Discovery Global, the planned spin-off of WBD's legacy linear television businesses, including the Discovery+ streaming service, and pending regulatory approval, the sale and spin-off were expected to both be completed in the third quarter of 2026. On the 8th of December 2025, Paramount launched a $77.9 billion hostile takeover of Warner Bros. Paramount argued its $30 per share all cash offer, versus Netflix's $27.75, and alleged lower regulatory hurdles were better for shareholders. On December 17, WBD told its shareholders to reject Paramount's bid, instead proceeding with the Netflix acquisition. The deal marked a significant shift in the media landscape, with Netflix becoming one of the largest content producers and distributors in the world. The company's original programming output continued to grow, with Netflix producing 240 new original shows and movies in 2018, and 371 in 2019, a figure greater than the number of original series that the entire U.S. TV industry released in 2005. The Netflix budget allocated to production increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a figure that once again overshadowed any of its competitors. The acquisition of Warner Bros. Discovery would give Netflix control over major IP such as DC Comics and rights to the Harry Potter franchise, along with HBO's premium dramas, and the company's original programming output continued to grow, with Netflix producing 240 new original shows and movies in 2018, and 371 in 2019, a figure greater than the number of original series that the entire U.S. TV industry released in 2005. The Netflix budget allocated to production increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a figure that once again overshadowed any of its competitors.
The Future of Streaming
Netflix's future as a streaming service is shaped by its ability to adapt to changing consumer preferences and technological advancements. In January 2025, Netflix announced that it had exceeded 300 million subscribers worldwide after adding a record 18.9 million in the fourth quarter of 2024, amounting to 41 million for the full year. In May 2025, Netflix announced a redesign of its home screen for the first time since 2013, which has a simplified appearance with more prominent metadata, and replaces the sidebar menu with a streamlined section of tabs along the top of the screen. Netflix stated that the redesign was meant to allow users to have an easier time figuring out if a title is right for them, and be more reflective of new types of content offerings such as sports and other live events. In August 2025, Netflix announced an exclusivity deal to stream the World Baseball Classic in Japan starting in 2026, and the 2026 edition marks the first time it will stream a live event in Japan. Through this agreement, Netflix will stream all 47 games of the 2026 World Baseball Classic live and on-demand for its users in Japan. The animated musical KPop Demon Hunters became Netflix's most popular film of all time later that month, and in November 2025, Netflix acquired rights to selected Major League Baseball games for the 2026 to 2028 seasons, including Opening Night, the Home Run Derby, and an additional special event matchup each season, including the 2026 season Field of Dreams game. The company's future as a streaming service is also shaped by its ability to expand into new markets and content categories, with Netflix announcing plans to open an engineering hub in its Warsaw office in January 2023, and the hub is to provide Netflix's creative partners with software solutions for the production of films and series. In February 2023, Netflix launched a wider rollout of spatial audio, and began allowing Premium subscribers to download content for offline playback on up to six devices, expanded from four. In the 4th of March 2023, Netflix broadcast its first-ever global live-streaming event, the stand-up comedy special Chris Rock: Selective Outrage, and the company reworked its viewership metrics again in June 2023, with viewership of shows measured during the first 91 days of availability, instead of the first 28 days, and now are based on the total viewership hours divided by the total hours of the show itself. This provided more equal considerations for shorter shows and movies compared to longer ones. In August 2023, the company announced Netflix Stories, a collection of interactive narrative games from Netflix series and movies such as Love is Blind, Money Heist, and Virgin River, and the company's future as a streaming service is also shaped by its ability to expand into new markets and content categories, with Netflix announcing plans to open an engineering hub in its Warsaw office in January 2023, and the hub is to provide Netflix's creative partners with software solutions for the production of films and series. In February 2023, Netflix launched a wider rollout of spatial audio, and began allowing Premium subscribers to download content for offline playback on up to six devices, expanded from four. In the 4th of March 2023, Netflix broadcast its first-ever global live-streaming event, the stand-up comedy special Chris Rock: Selective Outrage, and the company reworked its viewership metrics again in June 2023, with viewership of shows measured during the first 91 days of availability, instead of the first 28 days, and now are based on the total viewership hours divided by the total hours of the show itself. This provided more equal considerations for shorter shows and movies compared to longer ones. In August 2023, the company announced Netflix Stories, a collection of interactive narrative games from Netflix series and movies such as Love is Blind, Money Heist, and Virgin River, and the company's future as a streaming service is also shaped by its ability to expand into new markets and content categories, with Netflix announcing plans to open an engineering hub in its Warsaw office in January 2023, and the hub is to provide Netflix's creative partners with software solutions for the production of films and series.