When Americans Reed Hastings and Mark Randolph founded a DVD rental company 25 years ago called Netflixno one could have imagined that this company would raise $36 billion in capital to distribute audiovisual content.

Hastings often tells a story that links the origin of the world’s number one streaming platform to his anger after paying a $30 fine for late return of a tape. Apollo 13 in your trusted video store.

Although the reality is that even before Netflix was founded on August 28, 1997, the idea of ​​​​opening a VHS home video service was already in the mind of Hastings. William Azabal (Efe Agency).

The popularity of the DVD, an initial catalog of about a thousand titles, and the ability to return films a week later shaped a business idea that has grown into a giant over the past decades with over 11,500 employees.

While it is true that the two features that made Netflix special from the start were the ability for customers to pay a $20 monthly subscription to store DVDs for weeks at a time, and the ability to pick up full sagas or series seasons to watch them frequently. . .

“They weren’t the only ones offering these services at the time, but they have since managed to take the lead in the market,” explained Syracuse University professor and founder of Belair Television Center Robert J. Thompson in his article. interview with Efe.

public domain

In 2002, the company went public with a cost of one dollar per share, and five years later began streaming made his assets skyrocket.

By 2010, the Los Gatos, California-based company already had over twelve million subscribers, mostly from the US.

In addition, the massive purchase of smartphones around the world has enabled millions of new subscribers to tap into the large catalog of online movies and series.

“In terms of quantity, Netflix has a library of original games, and with their intellectual property rights, as big as Paramount+ or Disney+,” said Amanda Lotz, an expert in the field and now a professor at the University of Queensland. (Australia).

In 2018, Netflix was the platform with the most Emmy nominations and managed to win 23 awards; a year later, he won four Oscars for Rome D Period. End of sentence.

Then came the covid-19 epidemic and successive lockdowns that led to a rebound in Netflix’s business performance until 2022, thanks in part to successful productions such as squid game (squid game2021) or one fifth money robbery (2021).

alarm goes off

Since then, Netflix has seen a gradual loss of leadership as the most popular platform in the world, which caused alarm among its investors last year with the fall in its share price.

And it is that since 2019, in addition to its traditional competitors HBO and Amazon Prime Video, other services streaming as powerful as Disney+ or Apple TV+.

In fact, the company expected to lose up to two million followers in the second quarter of 2022, resulting in 970,000 unsubscribed accounts.

“There aren’t enough people on Earth for Netflix to grow to the level it was decades ago, but that doesn’t mean it won’t stop being relevant,” Professor Thompson said.

So far this year, the company has laid off up to 300 employees and has oriented its medium-term strategy around two main areas: penalizing accounts shared by multiple subscribers in which only one pays for a subscription, and the possible introduction of promotional content. through an inexpensive plan.

However, according to experts, if Netflix wants to stop the bleeding, it must now bet on including ads as well as streaming content live.

“However, it will be difficult because they don’t have the kind of useful customer data that other tech giants can use targeted ads,” said media industry researcher David Craig, currently at the University of Southern California. (USC).

The Importance of Sports

Netflix has already streamed some special events live, such as the Comedian Festival. Netflix – joke festivalbut, according to industry experts, sports are the future.

“ESPN+ (Disney+) broadcasts football in the US and DAZN broadcasts in Europe. This could be one way because the sport attracts many fans who are drawn to the added value of live content,” Craig said.

In addition, the researcher pointed to the “possibility” that “acquisition by a major technology or telecommunications company” or “merger with other platforms” could solve Netflix’s problems.

However, Netflix continues to maintain its privileged position as market leader. streaming worldwide with 220 million subscribers; 20 million more than Amazon, 15 more than the Disney empire (Disney+, Hulu, Star and ESPN+) and 180 million more than Apple TV+.