In 1999 the platform introduced the monthlysubscription business model (O’Brien, 2002); it consists in paying a flat-feeeach month in exchange for unlimited rentals. The innovating feature of thisbusiness is that costumers don’t have due dates to return rentals, no latefees, no shipping costs, and handling fees (Redwine,2017). Thecompany had considered the idea of providing movies online.
In the mid-2000sthe data speeds and capacity were able to offer the service of downloadingmovies from the internet. The idea consisted in a ”Netflix box” that allowedcostumers to download movies overnight and watch them the day after. However,with the increasing popularity of YouTube, Netflix decided to adapt thestreaming concept as well. The plan was completed in 2007 (Kyncl, 2017). In2006, Netflix introduced a new service which dealt with recommending movies. Byusing subscribers’ ratings, the platform can precisely foresee which movies asubscriber would like to watch by using a filtering algorithm. This service ledto huge success, it caused, in fact, an increase in rentals and subscribersacross the world.
In 2005 Netflix gained 4.2 million members, and two yearslater, in 2007, it delivered its billionth DVD by mail (Liedtke, 2007). In the same year, the digital platform offered videoon demand, thus streaming, to its subscribers. The big revolution ofNetflix’s strategy consisted in providing the opportunity to costumers ofwatching television shows and movies instantly on their PC’s and laptops aswell as on the traditional television. This service marked the beginning ofstreaming media as known these days.In the following years, the company collaborated with other companies to allowstreaming on electronic platforms, such as the Xbox 360, Blu-ray disc and smartTVs (Keating, 2012).In 2010 Netflix became available on Apple iPad and iPhones, Nintendo Wii aswell, and other Internet connected devices (Keating, 2012).
Hereafter,the digital platform expanded itself and made services available around theworld. In April 2014, Netflix had 50 million global subscribers with 32.3% videostreaming market share in the United States. The company offered its servicesin 41 countries worldwide. Just a couple ofmonths later, the digital platform improved the number of subscribers, of which36 million in the United States (Lawler, 2014). Thanksto the new service that allowed costumers to watch movies and shows offline, onApril 2017, Netflix reached the 100 million subscribers (Bond, 2017).
In themonth of October 2017, Netflix was estimated having 109.25 million subscribersworldwide, counting 50.85 million in the United States (Huddleston, 2017).