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Netflix, Inc.

legal form Incorporated
ISIN US64110L1061
founding August 29, 1997
Seat Los Gatos , California , United States
United StatesUnited States 
Number of employees 8,600 (2019)
sales $ 20.16 billion (2019)
Branch Film industry
As of December 31, 2019

Netflix, Inc. (of net , short for Internet and flicks as colloquial expression for 'Movies') is a US-based media company that deals with the fee-based streaming and the production of films and series employs.

The company was founded by Reed Hastings and Marc Randolph in 1997 in Los Gatos ( California ) and initially acted as an online video library with the distribution of films on DVD and Blu-ray to its subscribers. In 2007, Netflix entered the video-on-demand business and made the content available to subscribers via streaming. By March 2020, the media service had offered almost 3,000 film and television programs as streaming. As of June 2020, Netflix had 192.95 million paid subscriptions since its inception, of which 72.9 million were in the United States and Canada. In 2020, the company's market value of nearly $ 195 billion exceeded that of The Walt Disney Company .



The current Netflix logo
Netflix headquarters in Los Gatos

Netflix was founded on August 29, 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings . Randolph was the director of marketing for Hastings' Pure Atria in 1997 and co-founded MicroWarehouse , a computer shipping company.

Hastings sold Pure Atria to Rational Software Corporation in 1997 for $ 700 million . This was the largest company acquisition in the history of Silicon Valley at the time . They came up with the idea for Netflix while commuting between their homes in Santa Cruz and Pure Atria's headquarters in Sunnyvale , waiting for state regulators to approve the deal.

Randolph admired the fledgling e-commerce company Amazon and wanted to find a wide category of items that could be sold over the Internet using a similar model. They rejected VHS tapes as too expensive to keep and too fragile to ship. When they found out about DVDs , which were first introduced in the United States on March 24, 1997, they tested the concept of selling and renting DVDs by mail by mailing a CD to Hastings' home in Santa Cruz. When the CD arrived intact, they decided to try their business idea. Hastings is often quoted as saying that he decided to start Netflix after being fined $ 40 in a blockbuster store for being late to return a copy of the Apollo 13 film . This is being questioned as marketing spokes.

The company, in which Hastings and Marc Randolph invested $ 2.5 million in seed capital , began as an online DVD rental company with 30 employees and an assortment of 925 films. This was almost the entire catalog of printed DVDs at the time. When they rented them, they advertised that there were no fees for late returns of DVDs. In 1998, Amazon, which had been a startup just a few years earlier, tried to buy Netflix.

The first years and the IPO

Shipping DVDs with Netflix

Netflix introduced its monthly flat rate pricing model in September 1999 and dropped the single rental model in early 2000. The former, the company competed with the unlimited rental movie titles per customer, was sued by it in 2004 for misleading advertising and the litigation in a comparison was settled. In addition, the company advertised its subscription contracts as easy to understand, as all costs incurred (shipping and processing fees, etc.) were combined under a flat fee for customers.

In 2000, when Netflix was in the red despite its nearly 300,000 subscribers and the shipping of its DVDs was completely dependent on outside postal service providers , the company asked Blockbuster if they were interested in buying Netflix for $ 50 million. In the same year, Ted Sarandos joined the company as the company's chief content officer .

While Netflix recorded rapid growth as a dot-com company in early 2001, the company laid off a third of its 120 employees after the dot-com bubble burst and the attacks of September 11th . However, DVD player sales grew rapidly with each price reduction, so Netflix saw a huge surge in its subscription business in early 2002. In September 2002, the New York Times reported that at that time Netflix was sending about 190,000 DVDs a day to its 670,000 subscribers.

Netflix went public on May 29, 2002 , selling 5.5 million shares of common stock to investors at $ 15.00 per share . On June 14, 2002, the company sold an additional 825,000 common shares at the same price per share. After Netflix had always ended its fiscal years with a negative business up to then, Netflix achieved its first profit in fiscal 2003, with sales of 272 million US dollars, with 6.5 million US dollars. In 2005, 35,000 different films could be ordered; Netflix was shipping a million DVDs a day at the time.

Founding member Randolph left the company in 2004.

Introduction of video-on-demand / streaming, decline in DVD post rental

The company had been considering offering movies online for some time, but it wasn't until the mid-2000s that the data transfer rate and internet cost of downloading movies for mass consumption became acceptable. The original idea was a piece of hardware called a "Netflix box" that would allow movies to be downloaded overnight in a time slot. By 2005 they had acquired film rights and designed the box and service, and were ready to go public. After YouTube became popular, the concept of using a hardware device was discarded and instead replaced with a streaming concept, which became testable in 2007.

By then, Netflix had developed a personalized video recommendation system called Cinematch , which was based on the television behavior and ratings of each of its customers. On October 1, 2006, Netflix advertised $ 1 million in prize money to programmers who could develop an improved video recommendation algorithm.

In February 2007, Netflix had sent a billion DVDs. and began moving away from its original core DVD shipping business model by introducing video-on-demand or streaming . Netflix continued to gain customers from 2006 to 2011 despite the steady decline in DVD shipping.

When Netflix started streaming to subscribers in 2007, it couldn't initially offer more than 1,000 movies and TV shows (only 1% compared to its DVD mailing offering). However, as demand continued to grow, the number of titles available for streaming increased, reaching around 12,000 titles in June 2009. The recommendation system Cinematch, which is also independent films with einbezog was a factor for longer lasting customer loyalty and customer satisfaction and made other hand ensure movies smaller film studios a larger audience in the US was accessible, so that independent - film studios benefited.

Further expansion

In order to expand its business model, Netflix acquired the rights to the online distribution of films from the film studios Paramount Pictures , Lions Gate Entertainment and Metro-Goldwyn-Mayer for approximately one billion US dollars .

Netflix was only available in the United States until September 2010 and then began its international expansion with Canada . As of December 2010, Netflix was valued at about $ 10 billion.

For the third quarter of 2011, the company reported worldwide sales of $ 822 million. As of 2011, Netflix was offered in Latin America and the Caribbean .

In 2012 Netflix expanded to Europe and was initially available in Great Britain, Ireland and Scandinavia, in 2013 it entered the Netherlands and since September 2014 Netflix has been available in Germany , Austria , Switzerland , France , Belgium and Luxembourg .

Netflix is ​​one of the first supporters of the FIDO alliance , which has been developing the industry standard Universal Second Factor (U2F) for generally applicable two-factor authentication since 2013 .

In the first quarter of 2014, Netflix reported sales over a billion US dollars for the first time.

Expansion campus opened in Los Gatos in 2016

In January 2016, Netflix was activated in 130 more countries, making Netflix available worldwide except in the People's Republic of China , North Korea , Syria and the Crimea . As of July 2016, Netflix had 47 million subscribers in the United States alone , making it the largest video provider in the country. In terms of user numbers, Netflix already had more viewers in the US than any single conventional television channel.

In August 2017, Netflix bought Millarworld from comic book artist Mark Millar .

Since 2019, Netflix has been a member of the Motion Picture Association , an association of American film production companies. From 2011 to 2019 inclusive, Netflix had more than 167 million subscriptions.


A joint study by the Westfälische Wilhelms-Universität and the management consultancy Roland Berger from 2019 suggests that viewers are increasingly migrating from traditional TV channels to streaming services, but that the channels are not sufficiently prepared to compete with streaming providers. According to this, German viewers already spend more time with Netflix than with any other television provider, with 28% of the viewing time on Netflix for the group of young viewers. Netflix is ​​also rated significantly better in the studies with regard to content, experience, image and trust than the offers of traditional TV channels.

Market research

Netflix categorizes its customers as starters who have only watched two minutes of a film or series, watchers who cancel a film or series episode after 70%, and completers who have seen 90% of films or series. The figures for the three categories are reported back to the producers within the first 7 and 28 days after the release of a new film or a new series of series. Key figures for the success of the production over a month after publication are not collected.

In-house productions

House of Cards.svg
Orange is the new Black Logo.svg
Stranger Things logo.png
Logos of some in-house productions

In March 2011, Netflix announced that it would offer its customers its own productions in addition to reruns of other television series. In February 2013, for example, David Fincher's political drama House of Cards with Oscar winner Kevin Spacey in the lead role started as an in-house production . The series received special attention from the press and won three Emmys in 2013 . Another series with a lot of media attention is Orange Is the New Black , which was shown for the first time in 2013. She has received nominations and awards at the Emmys, the Golden Globes and the SAG Awards , among others .

Netflix also has exclusive rights to a number of action series produced by Disney and Marvel . These include series about Daredevil , Jessica Jones , Luke Cage , Iron Fist , the Defenders and Punisher .

In addition to new programs, Netflix takes over series discontinued by other stations. In May 2013, new episodes of the comedy series Arrested Development , which was discontinued by Fox in 2006 , were published. Other series that have continued in this way are Star Wars: The Clone Wars (season 6), The Killing (season 4) and Longmire (season 4). Netflix also produces spin-offs for discontinued series. The series Fuller House , a continuation of Full House , and Degrassi: The next class , based on Degrassi: The Next Generation , are currently being produced.

Netflix also produces foreign-language series in different parts of the world, for example Marseille in France , Club de Cuervos in Mexico or Hibana (Spark) in Japan . Like all in-house productions, these are available internationally. In May 2017, Netflix announced that it would announce six new European TV series by the end of 2017. Including the French series Osmosis, the two German-language original series Dark ( Showrunner : Baran bo Odar and Jantje Friese ) and Dogs of Berlin (Showrunner: Christian Alvart ). In 2016, Netflix released an estimated 126 specially produced series and films.

In 2017, Netflix released one of its highest budget films, the genre mix Okja , directed by Bong Joon-ho . Netflix invested $ 50 million in the transnational project. The film is about the young girl Mi-ja and her pet Okja , a genetically modified monster, and features an international cast. Netflix was aiming for expansion in Asia. Netflix developed into a large production studio and established itself as a new method of distribution and screening for filmmakers as well . The company finances various projects locally and internationally, blockbusters with well-known and cultural low-budget productions.

Business figures

Business and employee development
year Sales
in US $ million
Balance sheet profit
in million US $
Price per share
in US $
2002 151 381
2003 270 7th 2.08 567
2004 501 22nd 3.41 940
2005 682 42 2.60 985
2006 997 49 3.69 1,300
2007 1,205 67 3.12 1,542
2008 1,365 83 4.09 1,644
2009 1,670 116 6.32 1,883
2010 2.163 161 16.82 2,180
2011 3,205 226 27.49 2,348
2012 3,609 17th 11.86 2,045
2013 4,375 112 35.27 2,022
2014 5,505 267 57.50 2,450
2015 6,780 123 91.90 3,700
2016 8,831 187 102.03 4,700
2017 11,693 559 165.37 5,500
2018 15,794 1,211 319.29 7,100
2019 20,156 1,867 8,600

Efforts to produce new content and secure and diversify rights to additional content in 190 countries have resulted in the company incurring billions in debt : $ 21.9 billion as of September 2017, compared to $ 16.8 billion Dollars in the previous year. In October 2018, Netflix announced it would take out another $ 2 billion in debt to fund new content.

Environmental impact

Netflix is ​​now responsible for more than a third of all Internet traffic in the United States, which leads to significant energy consumption and, as a result, significant greenhouse gas emissions . The transmission and playback of on-demand video services such as Netflix emit around 100 million tons of carbon dioxide annually, which is around 0.3% of global emissions. The use of such video services releases about as much CO 2 per year as the state of Belgium . Netflix has played a substantial part in this.

Netflix has been part of the American Environmental Protection Agency's Green Power Partnership since April 2017 . According to their publications, Netflix consumes 172.5 gigawatt hours of electricity annually, both directly and indirectly through partners, of which 325% comes from renewable energies from biomass, solar and hydropower through the purchase of certificates . In comparison, Google's power consumption is 43 times as high as Microsoft's 34.7 times.



Initially, Netflix relied exclusively on products and technologies from Microsoft for streaming , such as VC-1 as the video codec and WMA as the audio codec . In the meantime, other standards such as H.264 or H.265 for video and Ogg Vorbis or AC-3 for audio are also used. The multitude of combinations means that a title has to be encoded up to 120 times with different codecs and settings.

The bit rate of the video will be adjusted when streaming to the speed of the internet connection of the viewer (Adaptive bit rate streaming). A speed of at least 1.5 Mbit / s is recommended for the lowest quality, while 25 Mbit / s is required for 4K videos .


Some of the offerings that Netflix wants to use to differentiate itself from the competition include English-language productions that are also available in various other languages.


Since November 30, 2016, Netflix has offered a download mode via the Android and iOS app, in which certain content can be downloaded and then viewed without an Internet connection. After a certain period of time, the content is no longer available for viewing and has to be downloaded again to prevent content from being viewed despite an expired license or subscription. The Windows 10 app has also supported downloads since April 2017.


Netflix uses Amazon Web Services for its IT infrastructure . Master copies of the films are stored on Amazon S3 servers .

The videos come to the end customers via external content delivery networks ( Akamai , Limelight , Level 3 ). Alternatively, larger Internet service providers can apply for the Netflix Open Connect appliance free of charge. These appliances use the FreeBSD - operating system and nginx - web server .

Netflix has been connected to the Düsseldorf Internet node ECIX since September 2014 . BCIX followed in Berlin in October 2014 . The transmission rate on the BCIX was increased to 40 Gbit / s in January 2016.


Netflix is ​​one of the few streaming providers that attach great importance to accessibility. Blind people or people with impaired vision can customize the subtitles. For example, the font, font size and font color of the subtitles can be adjusted according to your own needs. The subtitle is also provided in several languages ​​in almost all films and series.


Netflix has been using a flat rate pricing model since 1999. At the moment you can choose between the following three variants in Germany:

variant price resolution Number of devices
basic € 7.99 / month SD 1
default € 11.99 / month HD 2
Premium 15.99 € / month 4K 4th
  1. Number of devices that can be used to stream simultaneously

Device support

This list includes some devices supported by Netflix, including Blu-ray players, tablets , smartphones , HDTV receivers , home theater systems, set-top boxes, and game consoles .

product Manufacturer device Supported regions support sub
HDTV Audio
Roku SD Roku Set-top box United States No
Roku -
Yes App available in the
Channel Store
Roku LT United States, Canada, Great Britain / Ireland
Roku 2 HD
Roku 2 - XD and XS
Roku 3 Yes
Roku 4
BD300 LG Blu-ray player
BD640 Yes No
BD-P2500 / 2550 Samsung
BD-P1600 / 3600/4600 Yes No
LH50 series LG Smart TV All regions supported by Netflix Dolby Digital 5.1 Yes App available in the
LG TV App Store
BD370 Blu-ray player
Xbox 360 Microsoft Game console All regions supported by Netflix Yes Dolby Digital 5.1 Yes App available in the
Xbox Store
Xbox One / One S / One X Argentina, Australia, Austria, Belgium, Brazil,
Canada, Colombia, Denmark, Finland, France,
Germany, Ireland, Israel, Italy, Mexico, Netherlands,
New Zealand, Norway, Sweden, Switzerland, the
United Kingdom and the United States
Dolby Digital Plus 5.1
Nexus Player Asus Set-top box United States, Canada and Australia stereo
PlayStation 2 Sony Game console Brazil No
PlayStation 3 All regions supported by Netflix Yes Dolby Digital 5.1 Yes
PlayStation 4
PlayStation Vita Handheld console United States, Canada and Latin America No
Wii Nintendo Game console All regions supported by Netflix
Wii U Yes stereo
TiVo S3, HD, HD XL,
Premiere, Roamio
TiVo Digital video recorder
WD TV Live Plus Western
Set-top box
WD TV Live Gen 3 (2011) Dolby Digital Plus Yes
WD TV Play
Apple TV (2nd generation) Apple All regions supported by Netflix Yes
Apple TV (3rd generation) Dolby Digital 5.1
Apple TV (4th generation)
Apple TV 4K (5th generation) Dolby Digital 5.1, Dolby Digital Plus 7.1, Dolby Atmos
Boxee box D-Link United States
Chromecast Google Digital media receiver USA, Canada, Brazil, UK, Netherlands,
Nordic countries , Italy, Germany, Austria, Switzerland,
5.1 audio Yes
Amazon Fire TV Stick Amazon Certain services may not be
available outside of the United States
Dolby Digital Plus
certified, up to 7.1
Shortcut pre-installed on homescreen
YouView YouView Set-top box Dolby Digital 5.1
Rock box Strong
Digital media receiver Australia
MPT Digital media receiver /
set-top box
AN4M Digital media receiver
MR201, MR401, MR601 German


Set-top box Germany Dolby Digital 5.1
WeTek Core WeTek Set-top box stereo


In a test published by Stiftung Warentest in 2015 on the availability of current films and series, Netflix - like all streaming providers tested - scored only moderately. However, the image quality of the offer was rated very positively. The selection of films and series also depends on the location of the user, as the licenses have to be negotiated individually for each country. In Germany, the offer is reduced in an international comparison. The number of available titles can only be displayed via unofficial services.

In a new test in January 2020, Stiftung Warentest compared 11 different video streaming services and this time rated the respective original productions as a central point for the first time. In the "Video streaming by subscription" category, Netflix was the test winner with a rating of 2.8. The competitor Amazon Prime Video achieved second place with a grade of 3.3.


Web links

Commons : Netflix  - collection of pictures, videos and audio files

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