Perhaps no company in recent memory has been as revolutionary to the entertainment industry as Netflix Inc. (NASDAQ: NFLX). Once limited largely to cable TV service, movie rentals, and VCR recordings, Netflix has helped transform the entertainment landscape to an on-demand library of streamed content. At the time of writing, Netflix is available in 190 countries and boasts over 125 million customers worldwide.
While most people are familiar with Netflix and its vast array of viewing choices, here are a few lesser-known facts about the leader in streamed video content.
Netflix was Founded as a Result of a Blockbuster Late Fee — and Still Has DVD Subscribers
Netflix CEO Reed Hastings came up with the idea after getting socked with a late fee for a movie rental at Blockbuster Video. Hastings was inspired to create a service without late fees and used the money he received from the buyout of another software company to fund the venture. Netflix launched its first DVD rental service in 1998 and still has about 4 million subscribers.
Netflix Was Originally Called 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 on a permanent basis. 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 their DVD segment from Netflix and call it Quikster. The public hated the new name and Quikster vanished from the Netflix brand less than a month later.
Blockbuster Turned Down Offer to Buy Netflix for $50 Million
This story may not be a secret, but it is rich with irony. The company that inspired the creation of Netflix had a chance to buy Netflix outright in 2000 for the price tag of $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.
Five years later, in 2005, Netflix was up to 4.5 million customers while Blockbuster was struggling to evolve in an internet economy. Blockbuster, which peaked in 2004 with almost 9,000 retail locations, began struggling and 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 July 2018, only one Blockbuster location remains open in Bend, Oregon.
Netflix Streams Account for One-Third of All Internet Traffic
It is not surprising that Netflix is a bandwidth hog. What may be less known is the fact that in many areas of the world, Netflix is the largest source of internet activity. By some estimates, it accounts for roughly one-third of total internet traffic during peak usage periods.
$13 Billion in Original Content
Netflix is expected to spend $13 billion creating original content in 2018, much higher than the initial $8 billion the company had targeted at the beginning of this year. 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. With this war chest the company is actively looking to focus less on licensing shows that they do not own.
140 Million Hours a Day
It is estimated the average Netflix subscriber streams about 90 minutes of content every day. Given the number of subscribers who stream content daily, over 1 billion hours of content are streamed per week.
Netflix's 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 video can be easily found by searching "Example" in the search bar and trust us, it's worth the watch. The "show" features juggling, moonwalking, model trains, and a monologue from "Julius Caesar."