Perhaps no company in recent memory has been as revolutionary to the entertainment industry as Netflix Inc. (NFLX). Once limited by cable TV service, movie rentals, and VCR recordings, Netflix has helped transform the entertainment landscape to an on-demand library of streamed content. As of 2020, Netflix is available in 190 countries and boasts over 193 million paid memberships.

While most people are familiar with Netflix and its vast array of viewing choices, here are a few lesser-known facts about the streaming content giant.

Key Takeaways

  • Netflix, originally named Kibble, got its beginning when its co-founders looked to start "the of something," and finally settled on DVDs.
  • Netflix still accounts for a large share of internet traffic, despite the rise of competing services.
  • In 2000, Blockbuster passed up a $50 million deal to purchase Netflix.

1. Netflix's Inception

Netflix co-founder Marc Randolph came up with the idea for renting DVDs via mail during his quest to start the "the of something." It was previously reported by co-founder and CEO Reed Hastings that the idea was born after he hit with a late fee for a movie rental at Blockbuster.

Netflix launched its first DVD rental service in 1998 and still has about 2 million DVD subscribers.

2. Formerly Known as Kibble

The Netflix management team originally had some trouble coming up with a permanent name for the business. In its early days, Netflix co-founder Marc Randolph decided to call the company Kibble. It was the name that Randolph decided to use for test sites and legal documents but was not a name he wanted to use permanently. After several iterations and test names, Hastings and Randolph agreed on naming their business Netflix.

The company also had some branding issues when they attempted to split its DVD segment from Netflix and call it Qwikster. The public hated the new name and Qwikster vanished from the Netflix brand less than a month later.

3. Blockbuster Buyout

This story may not be a secret, but it is rich with irony. Netflix offered to sell itself to Blockbuster in 2000 for $50 million. Hastings envisioned an agreement where Netflix would act as the online complement to Blockbuster's traditional brick-and-mortar model. Blockbuster turned down the offer.

Four years later, at the end of 2004, Netflix had 2.6 million subscribers while Blockbuster was struggling to evolve in an Internet economy. Blockbuster had 9,100 retail locations at the end of 2004, but ultimately filed for bankruptcy in 2010.

At the end of 2017, Blockbuster operated just 9 stores, and Netflix was worth more than $40 billion. As of February 2020, only one Blockbuster location remains open in Bend, Oregon.

4. Netflix's Internet Traffic

It is not surprising that Netflix is a bandwidth hog. Netflix is second in terms of global internet traffic share. In first is the combined total of web-based streaming services (i.e., other HTTP media streaming). Netflix accounted for 12.6%. of the total downstream volume in the first half of 2019.

5. Billions on Content

Netflix spent $12 billion on streaming content in 2018 and $14.6 billion in 2019. To put that in perspective, that's nearly equivalent to the gross domestic product of Albania and more than the GDP of many countries like Madagascar. Going forward, Netflix plans to spend less on licensing shows and more on original content.

6. Millions of Hours a Day

Netflix vice president of for original content Cindy Holland has said the average Netflix subscriber streams about two hours of content every day. Given its 167 million subscribers, that's over 2 billion hours of content streamed per week on Netflix.

7. First Original "Show"

Netflix subscribers are likely familiar with the large library of original content that the company produces, including series such as "Orange Is the New Black" and "GLOW." However, the company was testing out video formats and capabilities long before any of those programs hit the streaming service.

An 11-minute-long video titled "Example Show" was used by Netflix as a means of testing its ability to successfully stream high-definition content. The "show" features juggling, moonwalking, model trains, and a monologue from "Julius Caesar."