Article of the Week - Netflix

Netflix, Inc. is an American provider of on-demand Internet streaming media available to viewers in North and South America, the Caribbean, and parts of Europe (Denmark, Finland, Ireland, The Netherlands, Norway, Sweden and the United Kingdom), and of flat rate DVD-by-mail in the United States, where mailed DVDs are sent via Permit Reply Mail. The company was established in 1997 and is headquartered in Los Gatos, California. It started its subscription-based digital distribution service in 1999; by 2009, Netflix was offering a collection of 100,000 titles on DVD and had surpassed 10 million subscribers. By the second quarter of 2014, there were more than 50 million subscribers.

Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software. Randolph was a co-founder of MicroWarehouse, a computer mail order company; and was later employed by Borland International as vice president of marketing. Hastings, who once worked as a math teacher, had founded Pure Software, which he had recently sold for $700 million. Hastings invested $2.5 million in startup cash for Netflix.

The idea of Netflix came to Hastings when he was forced to pay $40 in overdue fines after returning Apollo 13 well past its due date. The Netflix website was launched on August 29, 1997 with only 30 employees and 925 works available for rent and brought a more traditional, online pay-per-rental model (50¢US per rental U.S. postage; late fees applied). Netflix introduced the monthly subscription concept in September 1999, and then dropped the single-rental model in early 2000. Since that time, the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per title rental fees.