DVDs linger. They aren’t totally gone. But Netflix? It stopped being just a box-of-DVDs company decades ago. Now it’s a global streaming juggernaut. The shift wasn’t easy. A recent three-part TechStuff podcast, hosted by Jonathan Strickland, breaks down how Reed Hastings and Marc Rudolph built that empire from scratch.
The story starts in 1997. Hastings and Rudolph were software engineers. They saw a hole in the market. Brick-and-mortar shops like Blockbuster and Family Video dominated. People drove to them. They paid late fees. They picked what was on the shelf. Netflix offered something different. Rent DVDs by mail. It sounded weird then. DVDs were new. Most people still used VHS.
But the model worked because it removed friction. No late charges. A flat monthly fee for unlimited rentals. A recommendation algorithm that actually tried to guess what you wanted. By 2005, they had 4.2 million subscribers. That’s huge for a mail-order service.
Then came 2007. Netflix launched streaming. You could watch movies on a PC. It felt like magic. By 2008, it expanded to Xbox 360s and Blu-ray players. But the landscape was shifting. Hulu arrived. It was a joint venture between NBC Universal and News Corporation.
“So not everything on Netflix is ‘Fuller House.’ Thank goodness,” quips Jonathan.
Hulu was free. But it had ads. It also gave you the latest episodes of shows airing on TV. Netflix had no ads. But you paid. And you mostly got older content. The two companies clashed. Amazon and YouTube entered the chat too. The market was getting crowded.
Then Netflix almost broke itself.
In 2011, Hastings tried to split the company. He called the DVD arm “Qwikster.” The streaming arm stayed Netflix. The logic was sound on paper. Streaming was surging. DVDs were dying. But the customer experience? Terrible. If you wanted both, you needed two accounts. Two payments. Two separate queues. It was confusing.
The backlash was instant. Loud. Unrelenting. Hastings backed down after one month. He realized that splitting the brand was a fatal mistake. Qwikster died before it really lived.
That stumble taught a valuable lesson. Stick to the core identity. Netflix leaned harder into streaming. In 2013, they changed the game again. They released “House of Cards.” It wasn’t just a license. It was original programming. Washington intrigue. Kevin Spacey. Robin Wright. It won eight Emmy nominations in its first season. It was the first web-only show to get that kind of acclaim.
Now, Netflix is everywhere. As of 2018, they had 130 million memberships across 190 countries. They added nearly 7 million users in just one quarter that year. The content budget? $13 billion. They released 82 original movies in 2018 alone. Plus 700 new or licensed programs.
Hastings still jokes about the old days. He says he’ll personally deliver the last DVD to a customer around 2030.
And for the record: the rumor that Hastings founded Netflix because Blockbuster charged him $40 for a late “Apollo 13” fee? Discredited. Probably.
