Netflix: Problems and Solutions

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Netflix: Problems and Solutions Background While most users didn't find Netflix to be a widespread or household name until 2003-2004, Netflix was actually founded much, much earlier. Reed Hastings and Marc Randolph were two of the primary founders of Netflix, and they were both what is known as "new technology" entrepreneurs, seeking to rent and sell DVDs on the Internet marketplace (IDCH, 2004). One of the anecdotal parts of how the company began was in connection with how Hastings, who offered up the funding for the company (around 2.5 million dollars) landed on this idea when he had to pay $40 in fines when he returned a videotape of Apollo 13 late to a local video store (IDCH, 2004). During the time when Hastings and Randolph were in business, many Americans were still using and watching videotapes as the sole means of their home entertainment; however the founders of Netflix truly saw the potential of DVDs: they were less bulkier and could contain a much higher resolution film on it (IDCH, 2004). At this time, DVD players were also more expensive, meaning that less Americans owned them; however, Hastings and Randolph both saw the potential for these items and in a way, their business ended up promoting the use and acceptance of DVDs very strongly. "Key to the firm's initial strategy was the fact that few video stores carried DVDs, making renting them in person a hit-or-miss affair. The company was also able to take advantage of the small size and light weight of
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