What We Learned

Background 

Netflix was founded almost 30 years ago and has led nearly every major paradigm shift in the television and movie business ever since—up to and including its status as the dominant streaming platform today.

From offering an internet-based, mail-order Blockbuster alternative, to its eventual status as a market leader in streaming entertainment, the company has pioneered disruptive approaches ranging from the concept of binge-watching TV on demand to releasing full seasons of its original shows at once.

Today, the company produces and releases hundreds of original shows and dozens of original movies each year while branching out into original video games. Netflix also owns physical theaters, and is set to open retail stores in 2025.

Netflix 1.0

Netflix was founded by Reed Hastings and Marc Randolph in 1997 as a mail-order DVD rental service (interactive timeline). The first customers selected DVDs from the company’s website and received and returned them via regular mail. 

The approach included no late fees and quickly added the ability to rent an unlimited number of DVDs for a flat monthly fee, with the company passing 1 million subscribers in 2003. 

Netflix spent its first decade oscillating between survival and growth. It survived the dot-com bubble, went public in 2002, and emerged victorious in fierce competition with Blockbuster.

As high-speed internet became pervasive, Netflix shifted its emphasis from mail to the web. The company began streaming content directly to subscribers in 2007, letting them watch movies and TV shows instantly instead of waiting for DVDs by mail. The shift was the most significant operational turning point in Netflix’s history at that point. 

Netflix uses multiple algorithms that analyze user data and viewing history, including what they watch and how long they watch, to personalize the shows and movies that are recommended to each user.

Netflix 2.0

The company began offering original content in 2013. The move from intermediary to a provider of its own content was underscored by “House of Cards,” Netflix’s first original prestige drama—read about the show’s legacy here

Scale was Netflix’s focus during its second decade. The company attracted as many creators and Hollywood actors as possible, released as much content as possible, and used revenue from new subscribers to fuel growth. Hit franchises that followed included “Stranger Things” and “The Crown.”

The company invested $17B in new content in 2023, a year that saw the release of more than 1,500 titles, including films, TV series, documentaries, and comedy specials.

The Future

As of early 2024, Netflix has almost 270 million subscribers. That said, the company now faces more rivals than ever, including Amazon’s Prime Video (more than 200 million subscribers) as well as Disney+ (more than 150 million).

While Netflix’s growth has plateaued in its home market with 83 million subscribers in the US and Canada (as of 2024), its international subscribers currently top 186 million.

Here’s a look at Netflix’s 10 most-watched international TV shows of all time, many of which went on to enjoy worldwide popularity outside of their home markets (like South Korea’s "Squid Game" and Spain’s "Money Heist").

Dive Deeper

Relevant articles, podcasts, videos, and more from around the internet — curated and summarized by our team

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Netflix, for much of its first two decades, was very much an extension of the management philosophies of cofounder Reed Hastings. Radical candor, agility, and a hands-off approach to high-performing employees helped Netflix grow to become the biggest streaming service in the world. Hastings—who stepped down as CEO in 2023, but remains Netflix’s chairman—shares his management insights in this podcast interview.

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Some of the most consequential business stories of the modern era involve intense rivalries. In this season of Wondery’s podcast Business Wars, the focus is on the competition between Netflix and Blockbuster. It was the story of an agile upstart versus an entrenched incumbent, and this nine-part series explores the key strategies and pivotal moments in the rivalry that upended the entertainment business, setting the stage for the streaming wars.

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In 2006, Netflix launched an open competition for data science teams to create approaches that would best their own recommendation algorithm, offering $1M to the winners. Three years later, the prize was awarded after a group of competitors merged, developing a solution that beat Netflix's internal algorithm by more than 10%. Go inside the race that changed not only streaming entertainment, but how internet giants interact with their customers.

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With almost 270 million paying users, Netflix is the dominant force in streaming entertainment. But after enjoying a first-mover advantage for years, competitors are beginning to catch up. Most notable is Amazon, which leverages its Prime subscriptions to bundle Prime Video, and has amassed an estimated 200 million users. See an updated tracker of the world's biggest platforms by audience.

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Anne Aaron, Netflix’s senior encoding tech director, has spent over a decade improving how Netflix streams its content. Then along came the challenges associated with live events. Netflix has experimented with live content like standup comedy and sporting events. In this interview with The Verge, Aaron walks through the associated technical and coding challenges.

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Not every Netflix original TV show follows the same pattern. The streamer has experimented, for example, with different release schedules, such as releasing episodes in two tranches rather than dumping everything all at once. Its reality series often release episodes weekly. And then there’s a creative outlier like 'Kaleidoscope,' a crime drama with episodes that can be watched in any order.

Explore all Netflix

Search and uncover even more interesting information in our vast database of curated Netflix resources