Netflix At The United States

1758 Words Jul 12th, 2015 8 Pages
Netflix in the United States
2.1.1 The beginning of Netflix Company
The story of Netflix was a result of personal embarrassment by the Netflix’s founder, Reed Hastings. Back into 1997 where the whole story of the company begins, Hastings kept a rental VHS for six weeks, forgetting to return it to the rental store. He soon owed a late fee of $40 after he returned the videocassette back to the shop. It was the first time that Hastings faced the problem that there was a rental overdue fee from the local rental store. Later, Hasting found out that most of the local stores used this system to charge additional costs to the customers. Then it made he thought would it be possible if a business does not charge customers for late fee. Hence, he started to think about running a new movie rental business.

In the same year, 1997, he sold his company for $750 million and started Netflix Company with his colleague, Marc Randolph. At the start of the company, Netflix offered online movie rentals to customers. Then 2 years later, they provided the subscription service, offering customers an unlimited rental for one monthly fee. The company did not get any satisfying income for four straight years. Also the number of Netflix member was so small. Then Hastings decided to make an initial public offering (IPO). After it gone public, the company was breaking into profit and the number of members was increasing slightly to approximate 4 million by 2005 (Byrne, 2011, p.39). Then two years later,…
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