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Many leading publications call Netflix the most successful distributor of streaming video in history. The company was founded in 1997 by Reed Hastings and Marc Randolph. The entrepreneurs started business together, but Hastings played a more significant role in the company’s formation, being not only a good specialist, but also an excellent businessman. Both founders were not new to the IT industry. Before that, Hastings founded Pure Software, which was sold in 1997 for $ 700 million. Randolph was one of the leading specialists in it.
The decision on the initial placement of shares was taken after reaching half a million subscribers in February 2002. As a result, Netflix was able to raise $ 82 million, which surprised sceptics. The company strengthened its position by increasing number of contracts with film distributors to 50, while the project was supposed to pay them about 20% of revenue.
The first day of the trading was held on May 23, 2002. On the eve, Netflix shares were placed at a price of $ 15 per piece. At that time, the company was engaged in physical sales and DVDs rental, with audience of 600 thousand people. In early 2003, the number of subscribers reached a million. At the end of the year, the company reported the first profit of $ 6.5 million. In subsequent years, the growth of the service audience continued, reaching 4.2 million people in 2005.
Later, when sales of e-versions of films and TV shows started to transfer to the Internet, Netflix launched a streaming service. In 2010, Netflix co-founder and CEO Reed Hastings visited the iPhone 4 presentation and took to the stage with Steve Jobs to present the first iOS app. It was a turning point: the smartphone’s popularity helped to significantly expand the streaming service’s audience.
The number of platforms had also increased. By 2009, Netflix was available at Xbox, PS3, Blu-ray. In addition, the company presented a special gadget for watching Netflix movies - Roku. At the same time, the number of subscribers to Netflix streaming video reached 3 million. By the end of 2010, the streaming video company's audience had grown to 10 million. In the same year, the press reported that these achievements indicate a rejection of DVDs and a complete transition to the online broadcast.
After that, Hastings almost did not destroy the company by dividing the DVD and online streaming business. Instead of one general subscription for $ 9.99 a month, the company offered to pay $ 7.99 for every kind. The next day Netflix shares fell 19%, and, consequently, lost 35% against the background of a decrease in the number of subscribers. As a result, Netflix lost more than 3/4 of market value and became the subject of ridicule.
The company’s savior was "House of Cards", released in 2013. Netflix’s Content Director Ted Sarandos announced the exclusive premiere. Thanks to this, the number of subscribers has grown to 33.3 million, and the company's shares have almost recovered from the fiasco of 2011. In 2013, Netflix and Marvel Television set up to produce TV shows about four heroes: Daredevil, Jessica Jones, Iron Fist and Luke Cage. TV series from the cinematographic universe of Marvel, of course, should have increased the audience of the service. The contract was concluded for five years. In addition, Disney agreed to broadcast the sixth season of Star Wars: The Clone Wars animated series.
Since then, Netflix has spent billions of dollars on premium original content, significantly expanded options and improved the technological side of broadcasting. The company has reached the international level, and so the number of subscribers has increased to 100 million. Since the moment of IPO, Netflix shares have grown by almost 13,000%, and the market capitalization has approached to $ 68 billion - 22,000% more than it was originally.
In the year before the IPO, Netflix's loss was $ 38.6 million, revenue - $ 75.9 million. Last year, the company reported a profit of $ 186.7 million with revenue of $ 8.8 billion. But the company believes that the main success is still ahead and Netflix have a long way to go.
source: fortune.com
The decision on the initial placement of shares was taken after reaching half a million subscribers in February 2002. As a result, Netflix was able to raise $ 82 million, which surprised sceptics. The company strengthened its position by increasing number of contracts with film distributors to 50, while the project was supposed to pay them about 20% of revenue.
The first day of the trading was held on May 23, 2002. On the eve, Netflix shares were placed at a price of $ 15 per piece. At that time, the company was engaged in physical sales and DVDs rental, with audience of 600 thousand people. In early 2003, the number of subscribers reached a million. At the end of the year, the company reported the first profit of $ 6.5 million. In subsequent years, the growth of the service audience continued, reaching 4.2 million people in 2005.
Later, when sales of e-versions of films and TV shows started to transfer to the Internet, Netflix launched a streaming service. In 2010, Netflix co-founder and CEO Reed Hastings visited the iPhone 4 presentation and took to the stage with Steve Jobs to present the first iOS app. It was a turning point: the smartphone’s popularity helped to significantly expand the streaming service’s audience.
The number of platforms had also increased. By 2009, Netflix was available at Xbox, PS3, Blu-ray. In addition, the company presented a special gadget for watching Netflix movies - Roku. At the same time, the number of subscribers to Netflix streaming video reached 3 million. By the end of 2010, the streaming video company's audience had grown to 10 million. In the same year, the press reported that these achievements indicate a rejection of DVDs and a complete transition to the online broadcast.
After that, Hastings almost did not destroy the company by dividing the DVD and online streaming business. Instead of one general subscription for $ 9.99 a month, the company offered to pay $ 7.99 for every kind. The next day Netflix shares fell 19%, and, consequently, lost 35% against the background of a decrease in the number of subscribers. As a result, Netflix lost more than 3/4 of market value and became the subject of ridicule.
The company’s savior was "House of Cards", released in 2013. Netflix’s Content Director Ted Sarandos announced the exclusive premiere. Thanks to this, the number of subscribers has grown to 33.3 million, and the company's shares have almost recovered from the fiasco of 2011. In 2013, Netflix and Marvel Television set up to produce TV shows about four heroes: Daredevil, Jessica Jones, Iron Fist and Luke Cage. TV series from the cinematographic universe of Marvel, of course, should have increased the audience of the service. The contract was concluded for five years. In addition, Disney agreed to broadcast the sixth season of Star Wars: The Clone Wars animated series.
Since then, Netflix has spent billions of dollars on premium original content, significantly expanded options and improved the technological side of broadcasting. The company has reached the international level, and so the number of subscribers has increased to 100 million. Since the moment of IPO, Netflix shares have grown by almost 13,000%, and the market capitalization has approached to $ 68 billion - 22,000% more than it was originally.
In the year before the IPO, Netflix's loss was $ 38.6 million, revenue - $ 75.9 million. Last year, the company reported a profit of $ 186.7 million with revenue of $ 8.8 billion. But the company believes that the main success is still ahead and Netflix have a long way to go.
source: fortune.com
