Netflix Essay

1038 WordsFeb 7, 20125 Pages
Renting movies is a big business. Netflix, Inc. is at the top of that business, and the company is completely online. More commonly known as just Netflix, it is the largest Internet subscription service in the United States and Canada, with over 20 million members. Netflix enables members to rent unlimited movies and television shows without a delivery charge and watch them instantly via the Internet without ever leaving their home. Netflix has more than 10 million subscribers and more than 100,000 titles available. This flat rate rental service for television and movies has become the chief competitor in its industry. Currently headquartered in Los Gatos, California, Netflix, Inc. continues to grow daily. Reed Hastings and Marc Randolf began Netflix in 1997. The original name was NetFlix.com and was founded in Scotts Valley, California. Hastings, who sold a previous business, Pure Software, for $700 million, provided $2.5 million in startup cash to begin NetFlix.com. Hastings began the company after he was charged $40 for late fees after returning an overdue video tape, Apollo 13. Hastings believed that creating a business that only allowed rentals of DVDs had high potential because of the quality and that DVDs were inexpensive to ship. NetFlix opened for business in April 1998, allowing customers to rent movies for seven days for $4, plus $2 in shipping. Movies could be kept longer than the week at an additional charge. When the business first opened, NetFlix also allowed customers to purchase DVDs at up to a 30% discount. Additionally, consumers had the option to buy the rented DVD after receiving it. To promote its debut, NetFlix sponsored a sweepstakes in which customers could win an all-expenses-paid weekend in Los Angeles. This was a cross promotion with Warner Brothers to promote their newly available DVD, L.A. Confidential (FundingUniverse, 2008). A

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