Netflix has changed a lot since its creation in 1997.
Whether it's watching the latest episodes of ‘The Crown,’ entertaining your children with the many cartoons available, or getting caught up in a cult movie, Netflix is now part of everyday life in 200 million homes around the world. In the UK, the streaming platform has 15 million subscribers, which is a figure that dates from the beginning of 2020 and which has surely increased during the pandemic.
As the leader of a rapidly expanding subscription video streaming market, Netflix is one of the symbols of an American technology that has made its mark all over the world, alongside Amazon, Google, and Facebook, among others. And as you can see from this list of 10 facts and anecdotes about its history, the company has changed a lot since it was founded in 1997 by Reed Hastings and Marc Randolph.
Here are 10 facts and anecdotes that you probably don't know about Netflix and its history:
1. Netflix was called Kibble at first
When Reed Hastings and Marc Randolph founded Netflix in 1997, the company had another name during its first six months before its official launch: Kibble. During a question-and-answer session on Quora in 2019, Marc Randolph explained that the name was intended to be temporary. They deliberately chose such a bad name in order to force them to find a better definitive name.
Netflix was finally chosen from a list of different proposals, which also included TakeOne, SceneTwo, Flix, NowShowing, and WebFlix among others.
Even though Netflix was on the list, none of us really liked it. For a start, it was reminiscent of Skin-Flicks (the name given in the 80s and 90s to porn films). And of course, there was that 'X.' None of the other titles managed to get unanimous approval either. 'We have to agree on something,' I told the group. That's what we did. There was no show of hands, no secret ballot. We all agreed: we were Netflix.
2. Netflix started out by renting DVDs by mail, and still does in the United States
In 1997, offering films and series on-demand via internet streaming was of course not yet possible. Netflix's first business model was much more down-to-earth: it was a mail-order video-club, where you could order films on a website and receive them by post. The two founders took advantage of a technology that had appeared that year in the United States, DVDs, which were much more practical than VHS, and above all which could be transported in a regular envelope.
In 1999, Netflix introduced a business model that is still the same today: a monthly subscription that gives you access to as many DVDs as you want (although there are limits to the number of DVDs you can rent at the same time, a bit like at the library). In 2007, the company launched into video streaming, and it is thanks to this technology that it has now become a behemoth with 200 million subscribers.
More surprisingly, the DVD rental service is still active today! In 2020, it still had 2 million users. The subscription costs £6 per month for the right to rent one DVD at a time, and £9 for two DVDs. The rate is slightly higher for Blu-Ray.
3. Co-founder Reed Hastings invented an anecdote to explain how he came up with the idea for Netflix
Reed Hastings, Netflix co-founder and current CEO, has repeatedly shared an anecdote about the experience that gave him the idea for the mail rental service. In 2009, he explained:
Netflix's genesis dates back to 1997, when I received a late fee, about £29, for [not returning] 'Apollo 13' I remember it because I was embarrassed. It was in the VHS era, and it made me think there was a big market.
So I started looking into the possibility of setting up a mail-order film rental business, I didn't know about DVDs, and a friend told me they were going to be big. I ran to Tower Records in Santa Cruz, California, and mailed CDs to myself, just a disc in an envelope. It took 24 hours for the mail to get to my house, and I opened them and the records were all in good condition.
But according to Gina Keating, author of the book ‘Netflixed: The Epic Battle for America's Eyeballs,’ this story is an invention.
It didn't really happen, but the creation story [of Netflix] is long and complicated, and it wasn't done in a stroke of genius. It started out as a sort of marketing tool. It tells you all about how Netflix works.
4. The Netflix catalogue includes an 11-minute test video, filmed at the company's headquarters, with very strange content
Netflix's catalogue includes thousands of series and films, from the biggest American blockbusters to small auteur films and still shots of open fires. But perhaps the most experimental programme is an 11-minute short film called ‘Example Show.’ It shows a succession of shots of a fountain, an actor running, moonwalking, or even reciting a monologue from Shakespeare's ‘Julius Caesar.’
Filmed on the Netflix campus in Los Gatos, California, in 2010, this video is actually a test programme to check the quality of the image and sound, as well as the synchronisation of the two streams.
5. Netflix is available in every country in the world except China, North Korea, Syria, and Crimea
It is no exaggeration to say that Netflix is a global platform. The company says so on its website: its service is accessible in all but a handful of countries.
Due to economic sanctions imposed by the United States, Netflix cannot operate in North Korea, Syria, and the Crimea region.
Netflix is also not available in China, since the platform needs permission from the Chinese government, but Reed Hastings indicated in 2016 he is working on it, according to the BBC. However, the company's strategy may have changed since then.Several very popular Chinese platforms are already sharing the Chinese market and Netflix may have difficulty in gaining a foothold there.
In recent years, the American firm has signed agreements with various local platforms to sell its programmes to them. Netflix has also started producing programmes in Mandarin, but for the millions of speakers who live outside China, CNBC explained in 2019.
6. Netflix has strict rules regarding the cameras that filmmakers can use
While creators often claim that Netflix gives them a great deal of creative freedom, the platform imposes a few rules for its productions. Among them is the choice of cameras for filming, which must be approved by the company. A regularly updated list of around forty models, is thus published on the Netflix website.
All these cameras have the common feature of filming in 4K (or higher resolution). Some scenes can be filmed with other cameras, notably drone shots or those filmed underwater, but they must remain in the minority.
For the flashback scenes in ‘Da 5 Bloods,’ director Spike Lee had to battle with Netflix for permission to film with 16mm film cameras, as reported by Insider in 2020. However, it seems there are exceptions. For example, the film ‘The Devil All the Time’ was shot on 35mm film.
7. Christopher Nolan has said he will never work for Netflix
While more and more filmmakers are signing up with Netflix, some are still reluctant to work for the platform. The most emblematic is certainly Christopher Nolan, an ardent defender of the cinema experience in theatres, who is used to shooting his films in giant formats such as IMAX and 70mm.
In an interview with Indiewire in 2017, the ‘Dunkirk’ and ‘Inception’ director criticised Netflix's strategy of showing their films in theatres and on their platform almost simultaneously (only a few weeks apart).
They have this stupid policy of streaming everything simultaneously online and in theatres, which is obviously an untenable model for exhibitors. They don't even get into the game, and I think they're missing out on a huge opportunity. I think the investment that Netflix is making in interesting filmmakers and projects would be more admirable if it wasn't used as some sort of weird lever against theatres.
When asked if he was open to the idea of working with Netflix if a mainstream studio turned him down for a project, he replied categorically: ‘No. Why do it? If you're making a film for the cinema, it has to be shown in theatres.’
Christopher Nolan even compared Netflix's model to films released directly on VHS in the 90s.
I grew up in the 80s, the birth of the videotape. Your worst nightmare as a filmmaker in the 1990s was that the studio would turn around and say, 'You know what? We're going to release it on video rather than in theatres.' They used to do that all the time. There's nothing new about that.
Some time later, the director qualified what he said. In Variety, he apologised in an email to Netflix number two, Ted Sarandos, saying his statement gave no ‘context to the frankly revolutionary nature of what Netflix has done’ before admitting: ‘It's extraordinary. They need proper respect for [what they’re doing], and I have respect for them.’
8. Netflix has never won Best Series at the Emmy Awards
Surprisingly, Netflix has dominated the US television landscape for several years now, but the platform has never won an Emmy Award for Best Series, the equivalent of the Oscars for TV.
Although Netflix has garnered hundreds of nominations in all categories, even topping the list of the most-nominated broadcasters in 2018 and 2020, no program has ever managed to win one of the most prestigious awards, be it Best Drama Series, Best Comedy Series, or Best Mini-Series.
Netflix's main competitors have already won some of these awards. Amazon Prime Video has twice won Best Comedy for ‘The Marvellous Mrs Maisel’ and ‘Fleabag,’ and Hulu won Best Drama Series for ‘The Handmaid's Tale.’
However, Netflix won Best TV Film three years in a row, between 2017 and 2019, for ‘Black Mirror.’
9. Until this year, Netflix needed to go into debt to finance its programs
The large number of new programmes that Netflix launches each year suggests that Netflix has a lot of money in the coffers to fund them. But in reality, the company has needed to go into debt for several years now. This put its business model at risk.
As the New York Times wrote in January, Netflix borrowed a total of £11.5 billion in less than 10 years to finance its catalogue. Its investments are becoming increasingly expensive. Whereas in 2016 Netflix spent £4.9 billion on content, in 2019 this sum reached £10.5 billion.
It was a risky gamble for a new company like Netflix, investing a lot of money to develop its catalogue and attract more and more subscribers, before the Hollywood studios started streaming massively and caught up.