The History of Netflix, From DVDs to Hollywood Juggernaut

Netflix was founded after Reed Hastings was charged a $40 late fee for an overdue rental from Blockbuster.

Blockbuster closed in 2014, while Netflix remains atop the entertainment industry.

In his book “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea,” Randolph wrote that he and Hastings met with Bezos in 1998, who offered them “probably something between $14 million and $16 million,” Randolph wrote. They turned down the offer.

Netflix gained 239,000 subscribers in its first year, according to Inc.

“As you get older, if you’re lucky, you realize two things: what you like, but also what you’re good at,” Randolph told Forbes in 2019 on why he left Netflix. “The answer to both of them [for me] is early-stage companies. I like the chaos. I like the fact that you’re working on hundreds of things at once.”

Netflix ended 2006 with over 6 million subscribers for its DVD-rental service.

The company’s stock dropped 6% with the announcement. But Hastings, who was CEO at the time, said that he had “gotten used to” reservations.

The show was originally broadcast in Norway, but Netflix acquired the rights. It laid the foundation for Netflix’s binge-release model and its surge in original programming, including expanding into international markets.

“This was the first time we streamed a show across multiple countries and languages … and it worked,” Netflix’s current co-CEO Ted Sarandos wrote in a blog post in February 2022.

“House of Cards” and “Orange Is the New Black” are quickly become smash hits for Netflix, gaining critical acclaim and Emmys recognition.

The Cary Joji Fukunaga film, which was shot in Ghana, was the first of its kind to be released only on Netflix.

Netflix hit 100 million subscribers 10 years after it launched its streaming service.

Later in 2018, Netflix releases “Roma,” which becomes the streamer’s first best-picture nominee the following year.

Netflix has yet to nab the Oscars’ top prize, though, despite elaborate campaign spending. Apple TV+ won best picture for “CODA,” becoming the first streaming platform to do so.

Ted Sarandos and Reed Hastings have known each other since 1999. (You can read about how Sarandos nailed his original job interview with the company here.)

It took Netflix ten years to get its first 100 million subscribers — and under four years to double it.

Netflix nabbed best-series wins for the first time with “The Crown” (drama) and “The Queen’s Gambit” (limited series).

Netflix’s video games launch was free as part of a user’s subscription.

Aside from the economic strains of the coronavirus pandemic, Netflix blamed the subscriber loss partly on password sharing. It said that it estimated that an additional 100 million people use Netflix with a shared password. 

It also acknowledged increased competition. New streaming services like Disney+, HBO Max, Paramount+, and more entered the space on top of already existing rivals like Hulu and Prime Video.

Hastings confirmed during Netflix’s April 2022 earnings call that the company plans to roll out an ad-supported plan — something it has pushed back against in the past — as the streaming service faced slowing revenue growth and lost subscribers.

Other streamers have, like HBO Max and Paramount+, have embraced ads. Disney+, Netflix’s biggest rival, has also launched an ad-supported option.

In Q2 2022, Netflix said it lost 970,000 subscribers, a sign of company’s struggles that further underscored why it was introducing an ad-based plan and cracking down on password sharing. 

When the ad program launched, the streamer said it was nearly sold out of inventory.

The end of 2022 represented a bit of a bounce back for Netflix, as the entertainment company outpaced subscriber growth for the quarter by around 3.1 million, adding 7.66 new subscribers despite its own estimates of 4.5 million.

In total the streaming giant amassed 230.75 million subscribers by the end of 2022.

Netflix noted that after a decade into making original content, it was “past the most cash-intensive phase of this buildout.”

Reed Hastings spent 26 years leading Netflix, ushering it through an IPO and the growth of its streaming options.

Netflix announced it would end its DVD-rental services on September 29, 2023. It marked the end of a 25-year chapter for the business, which became known for its red envelopes.

Netflix began cracking down on password sharing in 2023, a move that – along with offering a cheaper, ad-supported subscription tier – helped it add new subscribers and deliver blowout earnings throughout 2024, quarter after quarter.

Netflix made a costly push into live sports content with a $5 billion deal for a weekly WWE show in the US, and to air other one-off pro wrestling events globally. The content will start rolling out in early 2025.

Netflix’s former firm chief Scott Stuber also left the company in January 2024. He was later replaced by Dan Lin, who has reportedly sought to implement a new strategy that shifts away from big-budget action films fronted by marquee stars.

In November 2024, Netflix’s ad business turned two years old. It announced it had 70 million ad-supported subscribers — up from 40 million the previous May — and said that more than half of new sign-ups were for ad-supported plans in countries where the option is available.

Netflix made another massive foray into live sports content in November, streaming a highly anticipated boxing match between Jake Paul and Mike Tyson, which drew a record-breaking 65 million concurrent viewers globally though the stream was beset by technical difficulties.

Netflix also streamed its first-ever NFL game on Christmas Day, following a previously announced pact with the NFL to carry holiday games through 2026. The spectacle featured Beyoncé performing at halftime as the Houston Texans faced off against the Baltimore Ravens.

Netflix announced a price hike in mid-January, raising its standard plan to $17.99 a month, up from $15.50. The premium plan with 4K video, which was previously $23 a month, rose to $25.

The company also lifted its ad-supported tier from $7 to $8 a month.

Netflix last raised its prices in October 2023. The move was aligned with similar increases at YouTube TV and Disney.

In an effort to cut down decision fatigue, Netflix refreshed its homepage design for the first time in a decade.

The new homepage promoted live events, used AI search, and enabled viewers to find what they wanted more quickly, executives said in a blog post and presentation previewing the changes.

The change also included a vertical video feed with clips of Netflix shows that can be tapped to watch immediately.

Netflix’s animated musical “K-Pop Demon Hunters” became its biggest movie ever.

The Netflix original, produced by Sony Animation, generated 236 million views in just 65 days. Analysts said that the movie provided a path for Netflix to compete with Disney in the family animation market.

While the streamer has been hesitant about theatrical releases, Netflix put “K-Pop Demon Hunters” in theaters for a sing-along experience.

For much of 2025, Netflix teased a push into video podcasting. The streamer once courted “Call Her Daddy” host Alex Cooper. Then, it struck a deal.

Netflix announced a partnership with Spotify in October, which would bring video versions of Spotify-owned The Ringer and Spotify Studios podcasts to the platform. These included “The Bill Simmons Podcast,” “The Rewatchables,” and “Conspiracy Theories.”

The podcasts will be available on Netflix in early 2026, per the deal, and will be removed from YouTube.

Netflix doesn’t have a theme park like Disney, but it does have a permanent installation at the King of Prussia mall.

The first-ever Netflix House opened in November outside Philadelphia. The location reimagined Netflix hits like “Wednesday” and “One Piece” into hands-on activities.

More locations are set to open in Texas and Las Vegas.

In a deal widely expected to shake up Hollywood, Netflix agreed to buy the studio and streaming businesses of Warner Bros. Discovery in a $72 billion deal. It is Netflix’s biggest acquisition in history.

In the deal, Netflix is planning to buy HBO Max and the top-performing Warner Bros. studio, but not WBD’s TV networks like CNN, TNT, and TBS.

Netflix competed against Paramount Skydance and Comcast for the acquisition.

“People across WBD have navigated extraordinary change over the last three years, while building a company with real creative, journalistic, and commercial strength,” WBD CEO David Zaslav wrote in a memo to staff about the deal. “That deserves to be acknowledged plainly.”