Reed Hastings, CEO, Netflix it seems it all started with a late movie and a large late return fee. Netflix was as simple as mailing movies to people and paying one flat rate regardless of how long you had the movie, i.e. no late fee. This simple model has transformed the way we watch movies.
People are no longer just getting movies mailed to their homes; they are now watching movies that are steaming directly to their mobile device, tablet or TV. According to recent data from Sandvine, 20 percent of the U.S.’s primetime non-mobile internet use is Netflix instant movies. Netflix began streaming movies in 2007, to with many technical glitches. However, with technological advances and the increase of broadband in homes it has become their primary service with the benefit of receiving movies in the mail as an additional service. Netflix has affected the industry and added a new dimension to cloud computing and internet based products.
Netflix does not have an easy road ahead of them. Comcast, Hulu, Amazon, Verizon and to some extent YouTube are all coming for that streaming movie business. And some of these companies have more ammunition than others. Comcast has started charging Level 3, Netflix’s back-end help in providing the mechanism for the movies to stream, per “movie” sent over its system to its customers. This doesn’t affect the end user as much as Netflix and Level 3.
What started as a good idea has transformed the way Americans watch movies. Netflix and Mr. Hastings have learned to stay ahead of the curve. They are willing to pay for the best and that allows them to stay in the lead and set the pace.