PRESENTED BY : ARYA GUPTA, ARPIT KUSHWAHA, ATUL KUMAR ORAON, ALTMAS KHAN, KRISHNA KUMAR
NETFLI
X
Netflix, Inc. is an American media company based in Los Gatos, California. Founded in
1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, it operates the over-
the-top subscription video on-demand service Netflix brand, which includes original films
and television series commissioned or acquired by the company, and third-party content
licensed from other distributors. Netflix is a member of the Motion Picture Association—
having become the first streaming company to become a member.
Netflix initially both sold and rented DVDs by mail, but the sales were eliminated within a
year to focus on the DVD rental business.In 2007, Netflix introduced streaming media and
video on demand. The company expanded to Canada in 2010, followed by Latin America
and the Caribbean. In 2013, the service began to acquire and produce original content,
beginning with the political drama House of Cards. By 2022, original productions
accounted for half of Netflix's library in the United States, and the company had ventured
into other categories, such as video game publishing via the Netflix service.
The company is ranked 115th on the Fortune 500 and 219th on the Forbes Global
2000.It is the second largest entertainment/media company by market capitalization
as of February 2022.In 2021, Netflix was ranked as the eighth-most trusted brand
globally by Morning Consult. During the 2010s, Netflix was the top-performing stock in
the S&P 500 stock market index, with a total return of 3,693%.As of January 2023,
Netflix had over 230 million subscribers worldwide, including 74.3 million in the United
States and Canada; 76.7 million in Europe, the Middle East and Africa, 41.7 million in
Latin America and 38 million in the Asia-Pacific region.
The Netflix service is available worldwide aside from Mainland China, Syria, North
Korea, and Russia. Netflix is headquartered in Los Gatos, California, in Santa Clara
County, with the two CEOs, Greg Peters and Ted Sarandos, split between Los Gatos
and Los Angeles, respectively. It also operates international offices in Asia, Europe and
Latin America including in Canada, France, Brazil, the Netherlands, India, Italy, Japan,
Poland, South Korea and the United Kingdom. The company has production hubs in Los
Angeles, Albuquerque, London, Madrid, Vancouver and Toronto.
Netflix was
founded by
Marc Randolph
and Marc Randolph
Reed Hastings
on August 29,
1997, in
Scotts Valley, Califo
rnia
. Reed Hastings
HISTOR
Y
Netflix was founded by Marc Randolph and Reed Hastings on August 29, 1997, in Scotts
Valley, California. Hastings, a computer scientist and mathematician, was a cofounder of
Pure Atria, which was acquired by Rational Software Corporation that year for $750 million,
the then biggest acquisition in Silicon Valley history.
Randolph had worked as a marketing director for Pure Atria after Pure Atria acquired a
company where Randolph worked. He was previously a co-founder of Micro Warehouse, a
computer mail-order company as well as vice president of marketing for Borland
International. Hastings and Randolph came up with the idea for Netflix while carpooling
between their homes in Santa Cruz, California, and Pure Atria's headquarters in Sunnyvale.
Patty McCord, later head of human resources at Netflix, was also in the carpool group.
Randolph admired Amazon.com and wanted to find a large category of portable items to
sell over the Internet using a similar model.
Hastings and Randolph considered and rejected selling and renting
VHS tapes as too expensive to stock and too delicate to ship. When
they heard about DVDs, first introduced in the United States in early
1997, they tested the concept of selling or renting DVDs by mail by
mailing a compact disc to Hastings's house in Santa Cruz.
When the disc arrived intact, they decided to enter the $16 billion
home-video sales and rental industry. Hastings is often quoted saying
that he decided to start Netflix after being fined $40 at a Blockbuster
store for being late to return a copy of Apollo 13, a claim since
repudiated by Randolph. Hastings invested $2.5 million into Netflix
from the sale of Pure Atria. Netflix launched as the first DVD rental
and sales website with 30 employees and 925 titles available—nearly
all DVDs published.
Randolph and Hastings met with Jeff Bezos, where Amazon offered to
acquire Netflix for between $14 and $16 million. Fearing competition
from Amazon, Randolph at first thought the offer was fair, but
Hastings, who owned 70% of the company, turned it down on the
plane ride home.
Initially, Netflix offered a per-rental model for each DVD but introduced a monthly subscription
concept in September 1999.The per-rental model was dropped by early 2000, allowing the
company to focus on the business model of flat-fee unlimited rentals without due dates, late fees,
shipping and handling fees, or per-title rental fees. In September 2000, during the dot-com
bubble, while Netflix was suffering losses, Hastings and Randolph offered to sell the company to
Blockbuster LLC for $50 million. John Anticoca, CEO of Blockbuster, thought the offer was a joke
and declined, saying, "The dot-com hysteria is completely overblown.“ While Netflix experienced
fast growth in early 2001, the continued effects of the dot-com bubble collapse and the
September 11 attacks caused the company to hold off plans for its initial public offering (IPO) and
to lay off one-third of its 120 employees.
DVD players were a popular gift for holiday sales in late 2001, and demand for DVD subscription
services were "growing like crazy", according to chief talent officer Patty McCord. The company
went public on May 29, 2002, selling 5.5 million shares of common stock at US$15.00 per share. In
2003, Netflix was issued a patent by the U.S. Patent & Trademark Office to cover its subscription
rental service and several extensions. Netflix posted its first profit in 2003, earning $6.5 million on
revenues of $272 million; by 2004, profit had increased to $49 million on over $500 million in
revenues. In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out
every day.
Expansion into international
productions
(2017-2023)
In November 2017, Netflix announced that it would be making its first
original Colombian series, to be executive produced by Ciro Guerra. In
December 2017, Netflix signed Stranger Things director-producer
Shawn Levy and his production company 21 Laps Entertainment to what
sources say is a four-year deal.
In 2017, Netflix invested in distributing exclusive stand-up comedy
specials from Dave Chappelle, Louis C.K., Chris Rock, Jim Gaffigan, Bill
Burr and Jerry Seinfeld.
In February 2018, Netflix acquired the rights to The
Cloverfield Paradox from Paramount Pictures for $50
million and launched on its service on February 4,
2018, shortly after airing its first trailer during Super
Bowl LII. Analysts believed that Netflix's purchase of
the film helped to make the film instantly profitable for
Paramount compared to a more traditional theatrical
release, while Netflix benefited from the surprise
reveal.
Other films acquired by Netflix include international
distribution for Paramount's Annihilation and Universal's
News of the World and worldwide distribution of
Universal's Extinction, Warner Bros.' Mowgli: Legend of
the Jungle, Paramount's The Lovebirds and 20th
Century Studios' The Woman in the Window. In March,
the service ordered Formula 1: Drive to Survive, a
racing docuseries following teams in the Formula One
world championship.
In March 2018, Sky UK announced an agreement with Netflix to integrate
Netflix's subscription VOD offering into its pay TV service. Customers
with its high-end Sky Q set-top box and service will be able to see Netflix
titles alongside their regular Sky channels. In October 2022, Netflix
revealed that its annual revenue from the UK subscribers in 2021 was
£1.4bn.In April 2018, Netflix pulled out of the Cannes Film Festival, in
response to new rules requiring competition films to have been released
in French theaters.
The Cannes premiere of Okja in 2017 was controversial, and led to
discussions over the appropriateness of films with simultaneous digital
releases being screened at an event showcasing theatrical film; audience
members also booed the Netflix production logo at the screening.
Netflix's attempts to negotiate to allow a limited release in France were
curtailed by organizers, as well as French cultural exception law—where
theatrically screened films are legally forbidden from being made
available via video-on-demand services until at least 36 months after
their release. Besides traditional Hollywood markets as well as from
partners like the BBC, Sarandos said the company also looking to expand
investments in non-traditional foreign markets due to the growth of
viewers outside of North America.
TECHNOLOGY
Netflix settlement freely peers with Internet service providers (ISPs) directly
and at common Internet exchange points. In June 2012, a custom content
delivery network, Open Connect, was announced. For larger ISPs with over
100,000 subscribers, Netflix offers free Netflix Open Connect server
appliances that cache their content within the ISPs' data centers or networks
to further reduce Internet transit costs.
By August 2016, Netflix closed its last physical data center, but continued to
develop its Open Connect technology. A 2016 study at the University of
London detected 233 individual Open Connect locations on over six
continents, with the largest amount of traffic in the USA, followed by Mexico.
As of July 2017, Netflix series and movies accounted for more than a third of
all prime-time download Internet traffic in North America.
On October 1, 2008, Netflix offered access to its service via a public application
programming interface (API).It allowed access to data for all Netflix titles, and allows
users to manage their movie queues. The API was free and allowed commercial use. In
June 2012, Netflix began to restrict the availability of its public API. They instead focused
on a small number of known partners using private interfaces, since most traffic came
from those private interfaces. In June 2014, Netflix announced they would be retiring the
public API; it became effective November 14, 2014.They then partnered with the
developers of eight services deemed the most valuable, including Instant Watcher,
Fanhattan, Yidio and Next guide.
NETFLIX REVENUE
Netflix generated $31.6 billion revenue in 2022, a 6.7% increase on the previous year. It reported
its first quarterly decline in Q4 2022.
NETFLIX SUBSCRIBERS
Netflix reported its first decline in subscriber count in Q1 2022, but it has seen two quarters of
growth since Q3 2022.
AWARDS
On July 18, 2013, Netflix earned the first Primetime Emmy Award nominations for original
streaming programs at the 65th Primetime Emmy Awards. Three of its series, Arrested
Development, Hemlock Grove and House of Cards, earned a combined 14 nominations
(nine for House of Cards, three for Arrested Development and two for Hemlock Grove).
The House of Cards episode "Chapter 1" received four nominations for both the 65th
Primetime Emmy Awards and 65th Primetime Creative Arts Emmy Awards, becoming the
first episode of a streaming television series to receive a major Primetime Emmy Award
nomination.
With its win for Outstanding Cinematography for a Single-Camera Series, "Chapter 1"
became the first episode from a streaming service to be awarded an Emmy. David
Fincher's win for Directing for a Drama Series for House of Cards made the episode the
first from a streaming service to win a Primetime Emmy.
On November 6, 2013, Netflix earned its first Grammy
nomination when You've Got Time by Regina Spektor — the
main title theme song for Orange Is the New Black — was
nominated for Best Song Written for Visual Media. On December
12, 2013, the network earned six nominations for Golden Globe
Awards, including four for House of Cards. Among those
nominations was Wright for Golden Globe Award for Best Actress
– Television Series Drama for her portrayal of Claire Underwood,
which she won.
With the accolade, Wright became the first actress to win a
Golden Globe for a streaming television series. It also marked
Netflix's first major acting award. House of Cards and Orange
is the New Black also won Peabody Awards in 2013.On
January 16, 2014, Netflix became the first streaming service
to earn an Academy Award nomination when The Square was
nominated for Best Documentary Feature.
Films and programs distributed by Netflix received 30
nominations at the 2021 Screen Actors Guild Awards, more than
any other distribution company, where their distributed films and
programs won seven awards including best motion picture for
The Trial of the Chicago 7 and best TV drama for The Crown.
Netflix also received the most nominations of any studio at the
93rd Academy Awards – 35 total nominations with 7 award wins.
In February 2022, The Power of the Dog gritty western
distributed by Netflix and directed by Jane Campion, received 12
nominations, including Best Picture, for the 94th annual
Academy Awards. Films distributed by the streamer received a
total of 72 nominations.
Campion became the third female to receive the Best Director
award, winning her second Oscar for The Power of the Dog. At
the 50th International Emmy Awards in November 2022, Netflix
original Sex Education won Best Comedy Series.
CONTENT
A "Netflix Original" is content that is produced, co-produced, or distributed by Netflix
exclusively on their services. Netflix funds their original shows differently than other TV
networks when they sign a project, providing the money upfront and immediately ordering
two seasons of most series, and keeping more future revenue opportunities from (such as
possible syndication, merchandising, etc.) on commercially-successful series. Over the years,
Netflix output ballooned to a level unmatched by any television network or streaming service.
According to Variety Insight, Netflix produced a total of 240 new original shows and movies in
2018, then climbed to 371 in 2019, a figure "greater than the number of original series that
the entire U.S. TV industry released in 2005."The Netflix budget allocated to production
increased annually, reaching $13.6 billion in 2021 and projected to hit $18.9 billion by 2025, a
figure that once again overshadowed any of its competitors. As of August 2022, original
productions made up 50% of Netflix's overall library in the United States.
Film and television deals
Netflix has exclusive pay TV deals with several studios. The deals give Netflix exclusive
streaming rights while adhering to the structures of traditional pay TV terms. Distributors
that have licensed content to Netflix include Warner Bros., Universal Pictures, Sony
Pictures Entertainment and previously The Walt Disney Studios (including 20th Century
Fox).
Netflix also holds current and back-catalog rights to television programs distributed by
Walt Disney Television, DreamWorks Classics, Kino International, Warner Bros. Television
and CBS Media Ventures, along with titles from other companies such as Allspark
(formerly Hasbro Studios), Saban Brands, and Funimation. Formerly, the streaming
service also held rights to select television programs distributed by NBCUniversal
Television Distribution, Sony Pictures Television and 20th Century Fox Television. Netflix
negotiated to distribute animated films from Universal that HBO declined to acquire, such
as The Lorax, ParaNorman, and Minions.
Netflix holds exclusive streaming rights to the film library of Studio Ghibli (with the
exception of Grave of the Fireflies) worldwide except in the U.S., Canada, China and Japan
as part of an agreement signed with Ghibli's international sales holder Wild Bunch in
2020.
CORPORATE AFFAIRS
Netflix grants all employees extremely broad discretion with respect to business
decisions, expenses, and vacation—but in return expects consistently high
performance, as enforced by what is known as the "keeper test.“ All supervisors are
expected to constantly ask themselves if they would fight to keep an employee.
If the answer is no, then it is time to let that employee go. A slide from an internal
presentation on Netflix's corporate culture summed up the test as: "Adequate
performance gets a generous severance package.“ Such packages reportedly range
from four months' salary in the United States to as much as six months in the
Netherlands.
The company offers unlimited vacation time for salaried workers and allows
employees to take any amount of their paychecks in stock options.
The company offers unlimited vacation time for salaried
workers and allows employees to take any amount of their
paychecks in stock options. About the culture that results
from applying such a demanding test, Hastings has said
that "You gotta earn your job every year at Netflix,“ and,
"There's no question it's a tough place...There's no question
it's not for everyone. "Hastings has drawn an analogy to
athletics: professional athletes lack long-term job security
because an injury could end their career in any particular
game, but they learn to put aside their fear of that constant
risk and focus on working with great colleagues in the
current moment.
In March 2021, Netflix announced that it would work to reach net zero
greenhouse gas emissions by the end of 2022, while investing in programs
to preserve or restore ecosystems. The company stated that it would cut
emissions from its operations and electricity use by 45 percent by 2030.
Due to the COVID-19 pandemic and lack of content production, Netflix had
a 14 percent drop in emissions in 2020.In 2021, Netflix bought 1.5 million
carbon credits from 17 projects around the world. Besides, Netflix
documentaries about climate change are believed to be 'helpful' to
increase awareness as they reach an international audience, more
importantly, they help catalyze global commitment to and action on
environmental change.
HISTORICAL FINANCIALS AND
MEMBERSHIP GROWTH
THANKYOU
