You have probably heard how Netflix (NASDAQ:NFLX) co-founder and CEO Reed Hastings came up with a new video rental model when Blockbuster charged him $40 for an overdue rental of Apollo 13. Armed with the $750 million he got from selling his first start-up business, Hastings went on to pioneer the DVD-by-mail business and then the digital video-streaming market, destroying Blockbuster along the way.
And who can forget the Qwikster incident? As the streaming service started to take off, Netflix decided to split off the DVD-mailer service into a completely separate business under the Qwikster name, charging subscribers independent monthly fees for DVD and streaming services. The customer backlash was immediate and intense, and Hastings quickly dropped the Qwikster label.
But did you notice that the Netflix you see today is very close to the original Qwikster idea? DVD mailers are now sold under the new brand of DVD.com, while the Netflix name continues to represent the leading digital streaming service.
Even if you already knew all of that, I'm sure you'll find some fresh nuggets among the following 12 fascinating Netflix facts.
- The first version of Netflix wasn't a subscription service at all. Instead, customers way back in 1998 paid $4per DVD rental plus $2 in mailing fees.
- The DVD subscription service was born in 1999.For a flat monthly fee of $16, subscribers to the so-called NetFlix.comMarquee program could enjoy four DVD rentals per month and no late fees.
- The price of a basic DVD player dropped below $300 in 1999,but VHS tapes still ruled the video rental market. Netflix was breaking new ground with this newfangled DVD-based idea.
- The first attempt at online video streaming was made in early 2007. Subscribers to the DVD service were treated to a limited amount of digital streaming, ranging from six to 18 hours per month depending on which DVD plan you were using. The digital catalog held only about 1,000 titles at the time, but it was all included as a bonus feature at no additional cost.
- One year later, Netflix allowed unlimited streaming alongside all but the lowest-cost DVD plan. The catalog had grown to 6,000 titles, and the necessary high-speed broadband connections were available in 55% of American homes.
- Right before the Qwikster debacle,Netflix sported 24.6 million domestic subscribers and another 967,000 customers in the recently launched Canadian market. In the next quarterly report, the total count of unique domestic subscribers had fallen to 23.8 million. Some 11.6 million users were paying for both DVD and streaming services, 9.9 million opted for only the streaming service, and 2.3 million held on to just the familiar DVD-mailer experience.
- Five years later,Netflix now has 47.5 million domestic streaming subscribers and 39.3 million international customers. The DVD business has dwindled to 4.3 million users.
- Netflix opened shop in Canada in 2010, followed by Latin America and the Caribbean in 2011. Streaming services launched across the British Isles and Scandinavia in 2012. The Netherlands followed suit in 2013, another six European markets got the green light in 2014, and 2015 filled in some blanks in Japan, Australia, New Zealand, and three more Western European markets. A global rollout followed in early 2016. Netflix is now available everywhere except for China, North Korea, Syria, and Crimea.
- Nowadays, the U.S. streaming catalog holds 4,100 movies and 46,720 episodes of TV series. The shows are organized into 2,700 seasons of 1,300 different series, according to the independent Instant Watcher service.
- Fully 90% of the movies and 85% of the shows can be streamed in 1080p "Super HD" quality or above, including 53 films and 69 serial seasons in the 4K-quality "Ultra HD" format.
- In 2014, I was able to watch and rank everything Netflix had ever published as a Netflix Original, picking Little Steven vehicle Lilyhammer as the best of the bunch. Now, I'm lucky if I find the time to keep up with the Netflix Originals that are closest to my heart (and sadly, Lilyhammer was canceled after three seasons).
- The company is spending about $1.3 billion on original productions in 2016, and content guru Ted Sarandos wants to step this expense up to about half of the annual $6 billion content budget in the near future. Ain't nobody got time for that -- but Netflix hopes that almost everybody will find something in this content flood to hold their fee-paying interest for the long run.
Next up, Netflix has promised to scale back its operating costs and start to make a large profit in 2017 and beyond. We still don't know exactly how big the annual bottom-line earnings might be, but Hastings will probably set up the goalposts in the fourth-quarter report, due in the middle of January. Keep an eye out for that potentially game-changing moment.
Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. Try any of our Foolish newsletter services free for 30 days.
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