Netflix

Netflix, Inc. is an American over-the-top content platform and production company headquartered in Los Gatos, California, United States. The company is a subscription-based streaming service provider offering online streaming from a library of films and television series, 40% of which is Netflix original programming produced in-house. It often produces more original series and films than any network or cable company. Netflix has also played a prominent role in independent film distribution.[8] As of July 2021, Netflix had 209 million subscribers, including 72 million in the United States and Canada.[9][10] It is available worldwide except in mainland China (due to local restrictions), Syria, North Korea, and Crimea (due to US sanctions). Netflix is a member of the Motion Picture Association (MPA).

Netflix, Inc.
Netflix 2015 logo.svg
Screenshot
Netflix - English.jpg
Screenshot of Netflix's English website in 2019
Type of businessPublic
Type of site
OTT platform
Traded as
FoundedAugust 29, 1997; 24 years ago (1997-08-29)[1] in Scotts Valley, California
HeadquartersLos Gatos, California, U.S.
Area servedWorldwide (excluding Mainland China, Crimea, North Korea and Syria)[2]
Founder(s)
Key people
IndustryTech & Entertainment, mass media
Products
Services
  • Film production
  • film distribution
  • television production
  • television distribution
RevenueIncrease US$25 billion (2020)
Operating incomeIncrease US$4.585 billion (2020)
Net incomeIncrease US$2.761 billion (2020)
Total assetsIncrease US$39.28 billion (2020)
Total equityIncrease US$11.065 billion (2020)
Employees12,135 (2021)
DivisionsUS Streaming
International Streaming
Domestic DVD
Subsidiaries
URLnetflix.com
RegistrationRequired
UsersIncrease 209 million (paid; as of July 20, 2021)
[7]

Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. Netflix's initial business model included DVD sales and rental by mail, but Hastings abandoned the sales about a year after the company's founding to focus on the initial DVD rental business.[8][11] Netflix expanded its business in 2007 with the introduction of streaming media while retaining the DVD and Blu-ray rental business. The company expanded internationally in 2010 with video on demand available in Canada, followed by Latin America and the Caribbean. Netflix entered the content-production industry in 2013, debuting its first series House of Cards. In January 2016, it expanded to an additional 130 countries and then operated in 190 countries.

The company is ranked 164th on the Fortune 500[12] and 284th on the Forbes Global 2000.[13] It is the largest entertainment/media company by market capitalization.[14] In 2021, Netflix was ranked as the 8th most trusted brand globally by Morning Consult.[15] During the 2010s decade, Netflix was the top-performing stock in the S&P 500 stock market index, with a total return of 3,693%.[16][17]

Netflix is based in Los Gatos, California, in Santa Clara County,[18][19] with the two CEOs, Hastings and Ted Sarandos, split between Los Gatos and Los Angeles, respectively.[20][21] The company is seen as part of the Silicon Valley high-tech world.[22] It also operates international offices in Asia, Europe, and Latin America including in Canada, France, Brazil, the Netherlands, India, Japan, South Korea, and the United Kingdom. The company has production hubs in Los Angeles,[23] Albuquerque,[24] London,[25] Madrid, Vancouver and Toronto.[26]

HistoryEdit

First logo, used from 1997 to 2000
Second logo, used from 2000 to 2001
Netflix logo used from 2001 to 2014
Netflix N icon used since 2016
 
Opened Netflix rental envelope containing a DVD of Coach Carter
 
Marc Randolph, co-founder of Netflix and the first CEO of the company
 
Reed Hastings, co-founder and the current chairman and CEO
 
Availability of Netflix, as of January 2016:
  Available
  Not available
 
Netflix advertising at Thong Lo BTS station, Bangkok
Netflix's longtime Los Gatos headquarters location and current legal address at 100 Winchester Circle (Building A)
Netflix's Los Gatos headquarters expansion campus at 90 to 160 Albright Way (Building G, 101 Albright Way).[18][19]
 
Netflix Los Angeles offices at 5808 W Sunset Blvd.

On August 29, 1997, Marc Randolph and Reed Hastings founded Netflix in Scotts Valley, California. Hastings, a computer scientist and mathematician, was a co-founder of Pure Atria, which was acquired by Rational Software Corporation in 1997 for $700 million, then the biggest acquisition in Silicon Valley history.[27] 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 MicroWarehouse, a computer mail-order company as well as vice president of marketing for Borland International.[28] 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.[11] Patty McCord, later head of human resources at Netflix, was also in the carpool group.[29] 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.[28] When they heard about DVDs, first introduced in the United States on March 24, 1997, they tested the concept of selling or renting DVDs by mail by mailing a compact disc to Hastings's house in Santa Cruz.[28] When the disc arrived intact, they decided to enter the $16 billion home-video sales and rental industry.[28][11] 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, but he and Randolph designed this apocryphal story to explain the company's business model and motivation.[11] Hastings invested $2.5 million in cash from the proceeds of the Pure Atria sale into Netflix.[30][11] Netflix launched as the world's first online DVD-rental store, with only 30 employees and 925 titles available—almost the entire catalogue of DVDs at the time.[11][31][32]

In 1998, Randolph and Hastings met with Jeff Bezos, where Amazon.com offered to acquire Netflix for between $14 and $16 million. Fearing competition from Amazon, Randolph at first thought the offer was fair but Hastings turned it down on the plane ride home. At that time Hastings owned 70% of Netflix and Randolph owned 30%.[33][34]

Netflix introduced the monthly subscription concept in September 1999,[35] then dropped the single-rental model in early 2000. The company then 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.[36]

In September 2000, when Netflix had 300,000 subscribers, annual losses of over $50 million, and was in financial trouble, Hastings and Randolph offered to sell the company to Blockbuster LLC for $50 million. John Antioco, CEO of Blockbuster, thought the offer was a joke and declined, saying "The dot-com hysteria is completely overblown".[37][38]

While Netflix experienced fast growth in early 2001, after the dot-com bubble burst and the September 11 attacks, Netflix laid off one-third of its 120 employees.[39]

However, around Christmas of 2001, DVD players became popular gifts and the DVD subscription service was "growing like crazy".[40]

Netflix became a public company via an initial public offering (IPO) on May 29, 2002, selling 5.5 million shares of common stock at US$15.00 per share.[41]

Randolph stepped down as CEO in 1999 and left the company in 2003 to mentor other startups.[33]

Netflix posted its first profit in 2003, earning US$6.5 million profit on revenues of US$272 million.

In September 2004, Netflix was sued for false advertising in relation to claims of "unlimited rentals" with "one-day delivery". The suit was settled in November 2005, with Netflix offering a free month of service or upgrade.[42]

By 2004, nearly two-thirds of United States homes had a DVD player.[43]

In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.[44]

By 2006, 81% of U.S. households owned DVD players, compared to 79% that owned VCRs.[45]

On October 1, 2006, Netflix announced the Netflix Prize, $1,000,000 to the first developer of a video-recommendation algorithm that could beat its existing algorithm Cinematch, at predicting customer ratings by more than 10%. On September 21, 2009, it awarded the $1,000,000 prize to team "BellKor’s Pragmatic Chaos".[46] Cinematch, launched in 2000, is a recommendation system that recommended movies to its users, many of which they might not ever had heard of before.[47][48]

Through its division Red Envelope Entertainment, Netflix licensed and distributed independent films such as Born into Brothels and Sherrybaby. In late 2006, Red Envelope Entertainment also expanded into producing original content with filmmakers such as John Waters.[49] Netflix closed Red Envelope Entertainment in 2008, in part to avoid competition with its studio partners.[50][51]

In January 2007, the company launched a streaming media service, introducing video on demand via the Internet. However, at that time it only had 1,000 films available for streaming, compared to 100,000 available on DVD.[52] The company had for some time, considered offering movies online, but it was only in the mid-2000s that data speeds and bandwidth costs had improved sufficiently to allow customers to download movies from the net. The original idea was a "Netflix box" that could download movies overnight, and be ready to watch the next day. By 2005, Netflix had acquired movie rights and designed the box and service. But after witnessing how popular streaming services such as YouTube were despite lack of high-definition content, the concept of using a hardware device was scrapped and replaced with a streaming concept.[53]

In February 2007, Netflix delivered its billionth DVD, a copy of Babel to a customer in Texas.[54][55]

In April 2007, Netflix recruited Anthony Wood, one of the early DVR business pioneers, to build a "Netflix Player" that would allow streaming content to be played directly on a television set rather than a PC or laptop.[56] While the player was initially developed at Netflix, Reed Hastings eventually shut down the project to help encourage other hardware manufacturers to include built-in Netflix support.[57] Wood quit Netflix and founded Roku, Inc. to launch the player, making him a billionaire. Netflix invested $6 million in Roku.[58]

In January 2008, all rental-disc subscribers became entitled to unlimited streaming at no additional cost (however, subscribers on the restricted plan of two DVDs per month ($4.99) remained limited to two hours of streaming per month). This change came in a response to the introduction of Hulu and to Apple's new video-rental services.[59][60]

In August 2008, the Netflix database was corrupted and the company was not able to ship DVDs to customers for 3 days, leading the company to move all its data to the Amazon Web Services cloud, which was completed in January 2016.[61]

On October 1, 2008, Netflix announced a partnership with Starz Inc. to bring 2,500+ new films and shows to "Watch Instantly", under Starz Play.[62]

In November 2008, Netflix began offering subscribers rentals on Blu-ray and discontinued its sale of used DVDs.[63]

In 2009, Netflix streams overtook DVD shipments.[64]

On January 6, 2010, Netflix agreed with Warner Bros. to delay new release rentals 28 days prior to retail, in an attempt to help studios sell physical copies, and similar deals involving Universal Pictures and 20th Century Fox were reached on April 9.[65][66][67]

In August 2010, Netflix reached a five-year deal worth nearly $1 billion to stream films from Paramount, Lionsgate and Metro-Goldwyn-Mayer. The deal increased Netflix's annual spending fees, adding roughly $200 million per year. It spent $117 million in the first six months of 2010 on streaming, up from $31 million in 2009.[68]

On September 22, 2010, the company first began offering streaming service to the international market, in Canada.[69][70]

In November 2010, Netflix began offering a standalone streaming service separate from DVD rentals.[71]

In 2010, Netflix acquired the rights to Breaking Bad, produced by Sony Pictures Television, after the show's third season, at a point where original broadcaster AMC had expressed the possibility of cancelling the show. Sony pushed Netflix to release Breaking Bad in time for the fourth season, which as a result, greatly expanded the show's audience on AMC due to new viewers binging on the Netflix past episodes, and doubling the viewership by the time of the fifth season. Breaking Bad is considered the first such show to have this "Netflix effect".[72]

In January 2011, Netflix introduced a Netflix button for certain remote controls, allowing users to instantly access Netflix on compatible devices.[73]

In March 2011, Netflix began acquiring original content for its library, beginning with the hour-long political drama House of Cards, which debuted in February 2013. The series was produced by David Fincher, and starred Kevin Spacey.[74]

As of March 28, 2011, Netflix had 58 DVD shipping locations throughout the United States.[75]

In May 2011, Netflix's streaming business became the largest source of Internet streaming traffic in North America, accounting for 30% of traffic during peak hours.[76][77][78]

In May 2011, streaming media continued to gain market share over DVDs.[79]

In May 2011, Time Warner CEO Jeff Bewkes welcomed Netflix's ability to monetize older content that was previously not generating money for media companies.[80]

On July 12, 2011, Netflix announced that it would separate its existing subscription plans into two separate plans: one covering the streaming and the other DVD rental services. Charging customers for its mail rental service and streaming service separately meant a price increase for customers who wanted to continue receiving both services.[81][82] The cost for streaming would be $7.99 per month, while DVD rental would start at the same price. The announcement led to panned reception among Netflix's Facebook followers.[83] Twitter comments spiked a negative "Dear Netflix" trend.[83][82]

On September 1, 2011, Starz ceased renewal talks with Netflix. As a result, Starz's library of films and series were removed from Netflix on February 28, 2012. Titles available on DVD were not affected and can still be acquired from Netflix via its DVD-by-mail service.[84] However, select films broadcast on Starz continue to be available on Netflix under license from their respective television distributors.

In September 2011, Netflix expanded to 43 countries in Latin America.[85][86][87]

On September 18, 2011, Netflix announced its intentions to rebrand and restructure its DVD home media rental service as an independent subsidiary called Qwikster, separating DVD rental and streaming services.[88][89] Andy Rendich, a 12-year Netflix veteran, was to be CEO of Qwikster. Qwikster would carry video games whereas Netflix did not.[90] It was also announced that the re-branded service would add video game rentals. The decision to split the services was widely criticized; it was noted that the two websites would have been autonomous from each other (with ratings, reviews, and queues not carrying over between them), and would have required separate user accounts. Also, the two websites would require separate subscriptions.[91][92][93][94]

However, on October 10, 2011, in a reversal, Netflix announced that it would retain its DVD service under the name Netflix and would not, in fact, create Qwikster for that purpose. Netflix announced that its streaming and DVD-rental plans would remain branded together.[95][96] Netflix announced that the reversal was in response to customer feedback, and that the DVD-by-mail and streaming services would continue to operate through a single website under the Netflix brand. Netflix lost 800,000 subscribers in the fourth quarter of 2011—a loss partially credited to the poor reception of the aborted re-branding.[93][94][97]

In November 2011, Netflix picked up two eight-episode seasons of Lilyhammer and a fourth season of the ex-Fox sitcom Arrested Development.[98][99]

On January 4, 2012, Netflix started its expansion to Europe, launching in the United Kingdom and Ireland.[100]

In March 2012, Netflix acquired the domain name DVD.com.[101] By 2016, Netflix rebranded its DVD-by-mail service under the name DVD.com, A Netflix Company.[102][103]

In April 2012, Netflix filed with the Federal Election Commission (FEC) to form a political action committee (PAC) called FLIXPAC.[104] Politico referred to the PAC, based in Los Gatos, California, as "another political tool with which to aggressively press a pro-intellectual property, anti-video-piracy agenda".[104] The hacktivist group Anonymous called for a boycott of Netflix following the news.[105] Netflix spokesperson Joris Evers indicated that the PAC was not set up to support the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA), tweeting that the intent was to "engage on issues like net neutrality, bandwidth caps, UBB and VPPA".[106][107]

In July 2012, Netflix hired Kelly Bennett, former Warner Bros. Vice President of Interactive, Worldwide Marketing, to become its chief marketing officer. This also filled a vacancy at Netflix that had been empty for over six months when previous CMO Leslie Kilgore left in January 2012.[108]

On August 23, 2012, Netflix and The Weinstein Company signed a multi-year output deal for RADiUS-TWC films.[109][110]

In September 2012, Epix signed a five-year streaming deal with Netflix. For the initial two years of this agreement, first-run and back-catalog content from Epix was exclusive to Netflix. Epix films came to Netflix 90 days after premiering on Epix. However, the exclusivity clause ended on September 4, 2012, when Amazon signed a deal with Epix to distribute its titles via the Amazon Prime Video streaming service.[111] These include films from Paramount, Metro-Goldwyn-Mayer and Lionsgate.[112][113]

On October 18, 2012, Netflix launched in Denmark, Finland, Norway and Sweden.[114][115]

On December 4, 2012, Netflix and Disney announced an exclusive multi-year agreement for first-run United States subscription television rights to Walt Disney Studios' animated and live-action films, with classics such as Dumbo, Alice in Wonderland and Pocahontas available immediately and others available on Netflix beginning in 2016.[116] Direct-to-video releases were made available in 2013.[117][118] The agreement with Disney ended in 2019 due to the launch of Disney+. Netflix retains the rights to continue streaming the Marvel series that were produced for the service.[119] Netflix will retain worldwide streaming rights to Two Lovers and a Bear and The Woman in the Window as Fox and Netflix jointly acquired the US distribution rights to Two Lovers and a Bear, and Netflix acquired worldwide distribution rights to The Woman in the Window from 20th Century Studios.[120][121]

On Christmas Eve 2012, Netflix experienced an outage blamed on Amazon Web Services.[122][123][124][125]

On January 14, 2013, Netflix signed an agreement with Time Warner's Turner Broadcasting System and Warner Bros. Television to distribute Cartoon Network, Warner Bros. Animation, and Adult Swim content, as well as TNT's Dallas, beginning in March 2013. The rights to these programs, previously held by Amazon Video, were given to Netflix shortly after deals with Viacom to stream Nickelodeon and Nick Jr. programs expired.[126] However, Cartoon Network's ratings dropped by 10% in households that had Netflix, and so many of the shows from that channel and Adult Swim were removed in March 2015.[127] Most of these shows were added to Hulu in May 2015.[128]

In early 2013, Netflix released the supernatural drama series Hemlock Grove.[129]

In 2013, the company decided to slow launches in Europe to control subscription costs.[130]

In February 2013, Netflix announced it would be hosting its own awards ceremony, The Flixies.[131]

On March 13, 2013, Netflix added a Facebook sharing feature, letting United States subscribers access "Watched by your friends" and "Friends' Favorites" by agreeing.[132] This was not legal until the Video Privacy Protection Act was modified in early 2013.[133]

In February 2013, DreamWorks Animation and Netflix co-produced Turbo Fast, based on the movie Turbo, which premiered in July.[134][135] Netflix has since become a major distributor of animated family and kid shows.

In July 2013, Orange Is the New Black debuted on Netflix,[136] which became Netflix's most-watched original series.[137][138]

In September 2013, Netflix launched in the Netherlands and was then available in 40 countries.[139][140]

In November 2013, Netflix and Marvel Television announced a five-season deal to produce live-action Marvel superhero-focused series: Daredevil, Jessica Jones, Iron Fist and Luke Cage. The deal involves the release of four 13-episode seasons that culminate in a mini-series called The Defenders. Daredevil and Jessica Jones premiered in 2015.[141][142][143] The Luke Cage series premiered on September 30, 2016, followed by Iron Fist on March 17, 2017, and The Defenders on August 18, 2017.[144][145]

In February 2014, Netflix discovered that Comcast Cable was slowing its traffic down and agreed to pay Comcast to directly connect to the Comcast network.[146][147][148]

On March 7, 2014, new Star Wars content was released on Netflix's streaming service: the sixth and final season of the television series Star Wars: The Clone Wars, as well as all five prior and the feature film.[149]

In April 2014, Netflix signed Arrested Development creator Mitchell Hurwitz and his production firm The Hurwitz Company to a multi-year deal to create original projects for the service.[150]

In April 2014, Netflix announced that it would raise the monthly price of the HD subscription plan from US$7.99 to $9.99 for new subscribers, but that existing customers would be grandfathered under this older price until May 2016, after which they could downgrade to the SD-only tier at the same price, or pay the higher fee for continued high definition access.[151][152][153] In May 2014, Netflix increased the fee for UK subscribers by £1 per month, with existing members grandfathered at the previous price for two years.[154]

In June 2014, Netflix unveiled a global rebranding: a new logo, which uses a modern typeface with the drop shadowing removed, and a new website UI. The change was controversial; some liked the new minimalist design, whereas others felt more comfortable with the old interface.[155]

On August 22, 2014, the animated sitcom BoJack Horseman premiered.[156][157][158]

In September 2014, Netflix became available in Austria, Belgium, France, Germany, Luxembourg, and Switzerland.[159]

On September 10, 2014, Netflix participated in Internet Slowdown Day by deliberately slowing down its speed in protest of net neutrality laws.[160]

In October 2014, Netflix announced a four-movie deal with Adam Sandler and his Happy Madison Productions.[161]

On December 12, 2014, the period drama Marco Polo premiered.[162]

In April 2015, following the launch of Daredevil, Netflix director of content operations Tracy Wright announced that Netflix had added support for audio description (a narration track with aural descriptions of key visual elements for the blind or visually impaired), and had begun to work with its partners to add descriptions to its other original series over time.[163][164] The following year, as part of a settlement with the American Council of the Blind, Netflix agreed to provide descriptions for its original series within 30 days of their premiere, and add screen reader support and the ability to browse content by availability of descriptions.[165]

In September 2015, at the World Maker Faire New York, Netflix revealed a prototype of a device called "The Switch", which allows Netflix users to turn off lights when connected to a smart home light system. It also connects to users' local networks to enable their servers to order takeout, and silence one's phone at the press of a button. Though the device hasn't been patented, Netflix released instructions on its website, on how to build it at home (DIY). The instructions cover both the electrical structure and the programming processes.[166][167][168]

In March 2015, Netflix expanded to Australia and New Zealand.[169][170]

On March 20, 2015, Bloodline was released.[171]

In June 2015, the science fiction drama Sense8 debuted, which was written and produced by The Wachowskis and J. Michael Straczynski.[172]

In September 2015, Netflix launched in Japan, its first country in Asia.[173][174][175]

In October 2015, Netflix launched in Italy, Portugal, and Spain.[176]

On November 6, 2015, Master of None, starring Aziz Ansari, premiered.[177]

Other comedy shows premiering in 2015 included Unbreakable Kimmy Schmidt,[178] Grace and Frankie, Wet Hot American Summer: First Day of Camp, and W/ Bob & David.

In January 2016, at the 2016 Consumer Electronics Show, Netflix announced a major international expansion of its service into 130 additional countries. It then had become available worldwide except China, Syria, North Korea and Crimea.[179][180][181][182][183][184][185][186][187][188]

Also in January 2016, Netflix announced it would begin VPN blocking of virtual private networks (VPNs) since they can be used to watch videos from a country where they are unavailable.[189] The result of the VPN block is that people can only watch videos available worldwide and other videos are hidden from search results, which can however be found on the Unofficial Netflix Online Global Search (uNoGS) website.[190]

In February 2016, Orange Is the New Black was renewed for a fifth, sixth and seventh season. On June 9, 2017, the fifth season was premiered and the sixth season premiered on July 27, 2018.[191]

In March 2016, Netflix introduced Netflix Party, whereby people can watch Netflix's programs together.[192][193]

In April 2016, the Netflix series in the Marvel Cinematic Universe were expanded further, to include a 13-episode series of The Punisher.[194][195]

In April 2016, Netflix announced it would be ending a loyalty rate in certain countries for subscribers who were continuously subscribed before price rises, raising their price to $9.99 per month.[196]

In May 2016, Netflix partnered with Univision to release Narcos.[197][198]

In May 2016, Netflix created a tool called Fast.com to determine the speed of an Internet connection.[199] It received praise for being "simple" and "easy to use", and does not include online advertising, unlike competitors.[200][201][202]

In June 2016, George Keritsis, a Netflix subscriber, sued the company over price increases, alleging he was told by a Netflix customer support representative in 2011 that he would pay the same price in perpetuity as long as he maintained his subscription continuously.[203] The plaintiff voluntarily dismissed the case in July 2016.[204]

In July 2016, the science fiction horror Stranger Things premiered, music-driven drama The Get Down premiered in August 2016, British historical drama The Crown premiered in November 2016, and other premieres in 2016 included comedy shows such as Love, Flaked, Netflix Presents: The Characters, The Ranch, and Lady Dynamite.[205]

On September 14, 2016, Netflix and 20th Century Fox jointly acquired US distribution rights to the Canadian independent drama film Two Lovers and a Bear following its screening at the Toronto International Film Festival on September 9, 2016.[120]

On November 30, 2016, Netflix launched an offline playback feature, allowing users of the Netflix mobile apps on Android or iOS to cache content on their devices in standard or high quality for viewing offline, without an Internet connection.[206][207][208][209]

In 2016, Netflix released an estimated 126 original series or films, more than any other network or cable channel.[210]

In January 2017, Netflix announced that all of Jerry Seinfeld's Comedians in Cars Getting Coffee episodes and season 10 would be on its service.[211]

In February 2017, Netflix announced 1,000 hours of original content to be released in 2017.[212]

In February 2017, Netflix signed a music publishing deal with BMG Rights Management, whereby BMG will oversee rights outside of the United States for music associated with Netflix original content. Netflix continues to handle these tasks in-house in the United States.[213]

In March 2017, at Barcelona's World Congress for mobile technologies, Netflix presented CNRS's open source technology creation: a compression tool allowing HD+ video quality with a bandwidth need of under 100 kilobytes per second, 40 times less than that of HDTV needs and compatible with mobile services worldwide. Since 2015, Netflix had received significant technical support from France's CNRS concerning video compression and formating, through CNRS' Laboratoire des Sciences du Numérique de Nantes (LS2N). [214]

On April 25, 2017, Netflix signed a licensing deal with IQiyi, a Chinese video streaming platform owned by Baidu, to allow selected Netflix original content to be distributed in China on the platform.[180][215]

As of July 2017, Netflix series and movies accounted for more than a third of all prime-time download Internet traffic in North America.[216]

On August 7, 2017, in the first acquisition of an entire company, Netflix acquired Millarworld, the creator-owned publishing company of comic book writer Mark Millar.[3]

On August 14, 2017, Netflix announced that it had entered into an exclusive development deal with Shonda Rhimes and her production company Shondaland.[217]

In September 2017, Netflix announced it would offer its low-broadband mobile technology to airlines to provide better in-flight Wi-Fi so that passengers can watch movies on Netflix while on planes.[218]

In September 2017, Minister of Heritage Mélanie Joly announced that Netflix had agreed to make a CDN$500 million (US$400 million) investment over the next five years in producing content in Canada. The company denied that the deal was intended to result in a tax break.[219][220] Netflix realized this goal by December 2018.[221]

In October 2017, Netflix iterated a goal of having half of its library consist of original content by 2019, announcing a plan to invest $8 billion on original content in 2018. There will be a particular focus on films and anime through this investment, with a plan to produce 80 original films and 30 anime series.[222]

In October 2017, Netflix introduced the "Skip Intro" feature which allows customers to skip the intros to shows on its platform. They do so through a variety of techniques including manual reviewing, audio tagging, and machine learning.[223][224]

In November 2017, Netflix announced that it would be making its first original Colombian series, to be executive produced by Ciro Guerra.[225]

In November 2017, Netflix signed an exclusive multi-year deal with Orange Is the New Black creator Jenji Kohan.[226]

In December 2017, it signed Stranger Things director-producer Shawn Levy and his production company 21 Laps Entertainment to what sources say is a four-year, seven-figure deal.[227]

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. While the film was critically panned, 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.[228][229] Other films acquired by Netflix include international distribution for Paramount's Annihilation[229] and Universal's News of the World and worldwide distribution of Universal's Extinction,[230] Warner Bros.' Mowgli: Legend of the Jungle[231] and Paramount's The Lovebirds.

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.[232]

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.[233][234][235]

In May 2018, chief content officer Ted Sarandos stated that Netflix had increased its spending on original content.[236]

On May 22, 2018, former president Barack Obama and his wife Michelle Obama signed a deal to produce docu-series, documentaries and features for Netflix under the Obamas' newly formed production company, Higher Ground Productions.[237][238] Higher Ground's first film, American Factory, won the Academy Award for Best Documentary Feature in 2020.[239]

In June 2018, Netflix announced a partnership with Telltale Games to port its adventure games to the service in a streaming video format, allowing simple controls through a television remote.[240][241] In September 2018, Telltale underwent a "majority studio closure" and laid off nearly its entire staff beyond a skeleton crew of 25 employees, citing a loss of funding.[242][243][244] However, the first game, Minecraft: Story Mode, was released in November 2018.[245]

In July 2018, Netflix acquired Lisa Taback's LT-LA consulting firm. Taback became VP of Talent Relations at Netflix.[4]

On August 16, 2018, Netflix announced a three-year deal with black-ish creator Kenya Barris. Under the deal, Barris will produce new series exclusively at Netflix, writing and executive producing all projects through his production company, Khalabo Ink Society.[246]

On August 27, 2018, the company signed a five-year exclusive overall deal with international best–selling author Harlan Coben. Under the multi-million pact, Netflix will work with Coben to develop 14 existing titles and future projects.[247] On the same day, the company inked an overall deal with Gravity Falls creator Alex Hirsch.[248]

In October 2018, according to Global Internet Phenomena Report, Netflix consumed 15% of all Internet bandwidth globally, the most by any single application.[249]

In October 2018, Netflix paid under $30 million to acquire Albuquerque Studios (ABQ Studios), a film and TV production facility with eight sound stages in Albuquerque, New Mexico that cost $91 million to build.[250]

In November 2018, Paramount Pictures signed a multi-picture film deal with Netflix, making Paramount the first major film studio to sign a deal with Netflix.[251] A sequel to AwesomenessTV's To All the Boys I've Loved Before was released on Netflix under the title To All the Boys: P.S. I Still Love You as part of the agreement.[252]

In December 2018, the company announced a partnership with ESPN Films on a television documentary chronicling the 1997–98 Chicago Bulls season titled The Last Dance. It was released internationally on Netflix and became available for streaming in the United States three months after a broadcast airing on ESPN.[253][254]

In January 2019, Netflix named Spencer Neumann, previously of Activision, as chief financial officer. This led to a lawsuit alleging poaching.[255]

In January 2019, Sex Education made its debut as a Netflix original series with much critical acclaim. It was praised for its refreshing take on the teen dramedy genre with honesty, vulnerability, and raunch.[256]

On January 22, 2019, Netflix sought and was approved for membership into the Motion Picture Association of America (MPAA), as the first streaming service to become a member of the association.[257]

In February 2019, The Haunting creator Mike Flanagan joined frequent collaborator Trevor Macy as a partner in Intrepid Pictures and the duo signed an exclusive overall deal with Netflix to produce television content.[258]

On May 9, 2019, Netflix contracted with Dark Horse Entertainment to make television series and films based on comics from Dark Horse Comics.[259]

Also on May 9, 2019, Netflix acquired the StoryBots children's media franchise to expand its educational content.[260][261]

In July 2019, Netflix announced that it would be opening a hub at Shepperton Studios as part of a deal with Pinewood Group.[262]

In early August 2019, Netflix negotiated an exclusive multi-year film and television deal with Game of Thrones creators/showrunners David Benioff and D.B. Weiss reportedly worth US$200 million.[263][264] Due to their commitments to Netflix, Benioff and Weiss withdrew from an earlier agreement with Disney to write and produce a Star Wars film series.[265][266][267] The first Netflix production created by Benioff and Weiss was planned as an adaptation of Liu Cixin's science fiction novel The Three-Body Problem, part of the Remembrance of Earth's Past trilogy.[268]

On September 30, 2019, in addition to renewing Stranger Things for a fourth season, Netflix announced signing the series’ creators The Duffer Brothers to a nine-figure deal for additional films and televisions shows over multiple years.[269]

On November 13, 2019, Netflix and Nickelodeon, owned by ViacomCBS, entered into a multi-year content production agreement to produce several original animated feature films and television series based on Nickelodeon's library of characters, in order to compete with Disney+, which had launched the day before. This agreement expanded on their existing relationship, in which new specials based on the past Nickelodeon series Invader Zim and Rocko's Modern Life (Invader Zim: Enter the Florpus and Rocko's Modern Life: Static Cling respectively) were released by Netflix. Glitch Techs was the first series to be released as part of the new agreement. Other new projects planned under the team-up include a music project featuring Squidward Tentacles from the animated television series SpongeBob SquarePants, and films based on The Loud House and Rise of the Teenage Mutant Ninja Turtles.[270][271][272]

In January 2020, Netflix opened an office in Paris with 40 employees.[273][274]

In January 2020, Netflix announced a new four-movie deal with Adam Sandler worth up to $275 million.[275]

In January 2020, Gwyneth Paltrow's series The Goop Lab was added as a Netflix Original. This led to widespread criticism of the streaming company for giving Paltrow a platform to promote her company Goop, which has been criticized for making unsubstantiated claims about the effectiveness of the health treatments and products it promotes.[276][277][278][279]

On January 24, 2020, Gloria Sanchez Productions entered a multi-year non-exclusive First-look deal with Netflix, and also entered a feature multi-year deal with Paramount Pictures.[280]

On February 25, 2020, Netflix formed partnerships with six Japanese creators to produce an original Japanese anime project. This partnership includes manga creator group CLAMP, mangaka Shin Kibayashi, mangaka Yasuo Ohtagaki, novelist and film director Otsuichi, novelist Tow Ubutaka, and manga creator Mari Yamazaki.[281]

On March 4, 2020, ViacomCBS announced that it will be producing two spin-off films based on SpongeBob SquarePants for Netflix.[282]

On April 7, 2020, Peter Chernin's Chernin Entertainment made a multi-year first-look deal with Netflix to make films.[283]

On May 29, 2020, Netflix announced the acquisition of Grauman's Egyptian Theatre from the American Cinematheque to use as a special events venue.[284][5][285]

In June 2020, Bozoma Saint John was named CMO.[286]

Bloomberg reported in 2019 that Ted Sarandos had risen past CEO Reed Hastings in salary, and that key company decisions were being made in Los Angeles where Sarandos kept his office.[20] In July 2020, Netflix appointed Sarandos as co-CEO.[21][287]

In July 2020, Netflix invested in Black Mirror creators Charlie Brooker and Annabel Jones’ new production outfit Broke And Bones.[6]

In September 2020, Netflix signed a multi-million dollar deal with the Duke and Duchess of Sussex. Harry and Meghan agreed to a multi-year deal promising to create TV shows, films, and children's content as part of their commitment to stepping away from the duties of the royal family.[288][289]

In September 2020, Hastings released a book on Netflix titled No Rules Rules: Netflix and the Culture of Reinvention, which was co-authored by Erin Meyer.[290]

In October 2020, Netflix announced a restructuring of executive management in its entertainment division.[291]

In December 2020, Netflix signed a first-look deal with Millie Bobby Brown to develop and star in several projects including a potential action franchise.[292]

In March 2021, Netflix warned users against sharing passwords of their account with others.[293]

On April 8, 2021, Sony Pictures Entertainment announced an agreement for Netflix to hold the U.S. pay television window rights to its releases beginning 2022, replacing Starz and expanding upon an existing agreement with Sony Pictures Animation. The agreement also includes a first-look deal for any future direct-to-streaming films being produced by Sony Pictures, with Netflix required to commit to a minimum number of them.[294][295][296]

On April 27, 2021, Netflix announced that it was opening its first Canadian headquarters in Toronto.[297] The company also announced that it would open an office in Sweden as well as Rome and Istanbul to increase its original content in those regions.[298]

In June 2021, Netflix announced its first wholly-owned, full-service, post-production facility in Mumbai, India, planned to be fully operational by June 2022 with 40 offline editing suites.[299]

On June 7, 2021, Jennifer Lopez’s Nuyorican Productions signed a multi-year first-look deal with Netflix spanning feature films, TV series, and unscripted content, with an emphasis on projects that support diverse female actors, writers, and filmmakers. Lopez co-runs Nuyorican Productions with her producing partner Elaine Goldsmith-Thomas.[300]

On June 10, 2021, Netflix announced it was launching an online store for curated products tied to the Netflix brand and shows such as Stranger Things and The Witcher.[301][302]

On June 17, 2021, Netflix announced a multi-year overall deal with comedy writer-producer Danielle Sanchez-Witzel. Under the deal, the first major talent pact since Tracey Pakosta joined Netflix as VP, Original Comedy Series, Sanchez-Witzel will set up her own production banner and focus on original development for series and features in addition to supervising and executive producing other projects.[303]

On June 21, 2021, Steven Spielberg's Amblin Partners signed a deal with Netflix to release multiple new feature films for the streaming service. Amblin is expected to produce at least two films a year for Netflix for an unspecified number of years.[304][305]

On June 30, 2021, Powerhouse Animation Studios (the studio behind Netflix's Castlevania) announced signing a first-look deal with the streamer to produce more animated series.[306]

In July 2021, Netflix hired Mike Verdu, a former executive from Electronic Arts and Facebook, as vice president of game development, along with plans to add video games by 2022.[307]

In July 2021, Netflix announced plans to release mobile games which would be included in subscribers' plans to the service.[308] Trial offerings were first launched for Netflix users in Poland in August 2021, offering premium mobile games based on Stranger Things including Stranger Things 3: The Game, for free to subscribers through the Netflix mobile app.[309]

On July 14, 2021, Netflix signed a first-look deal with Joey King, star of The Kissing Booth franchise, in which King will produce and develop films For Netflix via her All The King's Horses production company.[310]

On July 21, 2021, Zack Snyder, director of Netflix's Army of the Dead, announced he had signed his production company The Stone Quarry to a first-look deal with; his upcoming projects include a sequel to Army of the Dead, the sci-fi adventure film Rebel Moon.[311][312][313][314] In 2019, he agreed to produce an anime-style web series inspired by Norse mythology.[315][316]

As of August 2021, Netflix Originals made up 40% of Netflix's overall library in the United States.[317] The company announced that "TUDUM: A Netflix Global Fan Event", a three-hour virtual behind the scenes featuring first-look reveals for 70 of the streamer's properties, would have its inaugural show in late September 2021.[318][319] In 2021, Peter Friedlander was named new boss of the studio.[320]

Membership growthEdit

In September 2002, The New York Times reported that, at the time, Netflix mailed about 190,000 discs per day to its 670,000 monthly subscribers.[321] The company's published subscriber count increased from one million in the fourth quarter of 2002 to around 5.6 million at the end of the third quarter of 2006, to 14 million in March 2010.

In April 2011, Netflix had over 23 million subscribers in the United States and over 26 million worldwide.[322]

On October 24, 2011, Netflix announced 800,000 subscriber cancellations in the United States during the third quarter of 2011, and more losses were expected in the fourth quarter of 2011. However Netflix's income jumped 63% for the third quarter of 2011.[323][324] Year-long, the total digital revenue for Netflix reached at least $1.5 billion.[325]

Netflix added 610,000 subscribers in the United States in the fourth quarter of 2011, totaling 24.4 million United States subscribers for this time period.[326] On October 23, however, Netflix announced an 88% decline in profits for the third quarter of the year.[327]

In January 2013, Netflix reported that it had added two million United States customers during the fourth quarter of 2012, with a total of 27.1 million United States streaming customers, and 29.4 million total streaming customers. In addition, revenue was up 8% to $945 million for the same period.[328][329] That number increased to 36.3 million subscribers (29.2 million in the United States) in April 2013.[330] As of September 2013, for that year's third quarter report, Netflix reported its total of global streaming subscribers at 40.4 million (31.2 million in the United States).[331] By the fourth quarter of 2013, Netflix reported 33.1 million United States subscribers.[332] By September it, Netflix had subscribers in over 40 countries, with intentions of expanding services in unreached countries.[333]

In April 2014, Netflix had 50 million global subscribers with a 32.3% video streaming market share in the United States. Netflix operated in 41 countries around the world.[334]

In July 2014, Netflix surpassed 50 million global subscribers, with 36 million of them being in the United States.[335]

In August 2016, Netflix reported 74.8 million subscribers and predicted it would add 6.1 million more by March 2016. Subscription growth has been fueled by its global expansion.[336]

On April 17, 2017, Netflix neared 100 million subscribers.[337]

As of 2017, the DVD rental service had 3.3 million customers, and Hastings stated plans to keep it for at least five more years.[338]

By October 2018, Netflix's customer base reached 137 million worldwide, confirming its rank as by far the world's biggest online subscription video service.[339]

During the COVID-19 pandemic in 2020 when many cinemas around the world were closed, Netflix acquired 16 million new subscribers, almost doubling the result of the final months of 2019.[340]

By October 2020, Netflix had over 195 million paid subscriptions worldwide, including 73 million in the United States.[341]

Evolution of worldwide VOD subscribers of Netflix[342][343][344][345][341][346]
End of year Paying VOD
customers
(in millions)
Paying DVD
customers
(in millions)
Q4 2013[342] 41.43 6.77
Q4 2014[342] 54.48 5.67
Q4 2015[343] 70.84 4.79
Q4 2016[343] 89.09 4.03
Q4 2017[344] 110.64 3.33
Q4 2018[344] 139.26 2.71
Q4 2019[345] 167.09 2.21
Q1 2020[341] 182.86 N/A
Q2 2020[341] 192.95 N/A
Q4 2020[346] 203.66 N/A

Historical financials and stock price historyEdit

In 2010, Netflix's stock price increased 219% to $175.70 and it added eight million subscribers, bringing its total to 20 million. Revenue jumped 29% to $2.16 billion and net income was up 39% to $161 million.[347]

 
Netflix's booth at the 2017 San Diego Comic-Con

During Q1 2011, sales and rentals of DVDs and Blu-rays plunged about 35%, and the sell-through of packaged discs fell 19.99% to $2.07 billion, with more money spent on subscription than in-store rentals. This decrease was attributed to the rising popularity of Netflix and other streaming services.[348] In July 2011, shares were trading for $299. Following the customer dissatisfaction and resulting loss of subscribers after the announcements by CEO Hastings that streaming and DVD rental would be charged separately, leading to a higher price for customers who wanted both (on September 1), and that the DVD rental would be split off as the subsidiary Qwikster (on September 18), the share price fell steeply, to around $130.[349][350] However, on October 10, 2011, plans to split the company were scrapped. The reason being that "two websites would make things more difficult", he stated on the Netflix blog. On November 22, Netflix's share tumbled, as share prices fell by as much as 7%.[351] By December 2011, as a consequence of its decision to raise prices, Netflix had lost over 75% of its total value from the summer.[352][353]

Netflix spent about $5 billion on original content in 2016, compared to [354] a 2015 revenue of US$6.77 billion (2015).[355]

In the first quarter of 2018, DVD rentals earned $60.2 million in profit from $120.4 million in revenue.[356]

On January 22, 2018, the company crossed $100 billion in market capitalization, becoming the largest digital media and entertainment company in the world, bigger than every traditional media company except for AT&T, Comcast and Disney[357][358] and the 59th largest publicly traded company in the US S&P 500 Index.[359]

For the fiscal year 2018, Netflix reported earnings of US$1.21 billion, with an annual revenue of US$15.8 billion, an increase of approximately 116% over the previous fiscal cycle. Netflix's shares traded at over $400 per share at its highest price in 2018, and its market capitalization reached a value of over US$180 billion in June 2018. Netflix ranked 261 on the 2018 Fortune 500 list of the largest United States companies by revenue.[360] Netflix was the top-performing S&P 500 stock of the 2010s, with a total return of 3,693%.[361][362] [363]

On March 2, 2018, Netflix stock price surged to a new all-time high of $301.05 beating its 12-month price target of $300.00, and finishing the session with a market capitalization of $130 billion putting it within shouting distance of traditional media giants like Disney ($155 billion) and Comcast ($169 billion). Netflix had 117.6 million subscribers as of 2018, with 8.3 million being added in the fourth quarter of 2017.[364] That year, the company had $6.5 billion in long-term debt.

In 2019, Netflix reported revenues of $20.1bn and a net income of $1.9bn. The company had total assets of $34.0bn, primarily content assets ($24.5bn). Netflix is now[when?] considered the largest buyer of video content globally.[citation needed]

In 2020, during the COVID-19 pandemic Netflix reported "revenue for the quarter ending March 31, 2020 was $5.768B, a 27.58% increase year-over-year."[365] In November, Netflix pledges 1 billion dollars towards making its ABQ studios the biggest in the world.[366]

Netflix ended 2020 with slightly more than 203 million subscribers.[367]

In January 2021, Netflix's subscribers were 200 million based on its Q4 2020 earnings report.[citation needed]

As of December 31, 2020, the company had $16 billion in long term debt, which it accumulated to fund its growth.[7][368]

Year Revenue
in mil. USD-$
Net income
in mil. USD-$
Price per Share
in USD-$
Employees Paid memberships
in mil.
Fortune 500
rank
2005 682 42 2.59 2.5
2006 997 49 3.69 4.0
2007 1,205 67 3.12 7.3
2008 1,365 83 4.09 9.4
2009 1,670 116 6.32 11.9
2010 2,163 161 16.82 2,180 18.3
2011 3,205 226 27.49 2,348 21.6
2012 3,609 17 11.86 2,045 30.4
2013 4,375 112 35.27 2,022 41.4
2014 5,505 267 57.49 2,450 54.5
2015 6,780 123 91.90 3,700 70.8 #474
2016 8,831 187 102.03 4,700 89.1 #379
2017 11,693 559 165.37 5,500 117.5 #314
2018 15,794 1,211 7,100 139.3 #261
2019 20,156 1,867 8,600 167.1 #197
2020 24,996 2,761 9,400 203.7 #164

Corporate affairsEdit

Corporate cultureEdit

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."[369][370] 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.[371] A slide from an internal presentation on Netflix's corporate culture summed up the test as: "Adequate performance gets a generous severance package."[370] Such packages reportedly range from four months' salary in the United States to as much as six months in the Netherlands.[371]

The company offers unlimited vacation time for salaried workers and allows employees to take any amount of their paychecks in stock options.[372]

About the culture that results from applying such a demanding test, Hastings has said that "You gotta earn your job every year at Netflix,"[373] and, "There's no question it's a tough place...There's no question it's not for everyone."[374] 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.[375]

Environmental impactEdit

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.[376][377]

ServicesEdit

Netflix's video on demand streaming service, formerly branded as Watch Now, allows subscribers to stream television series and films via the Netflix website on personal computers, or the Netflix software on a variety of supported platforms, including smartphones and tablets, digital media players, video game consoles and smart TVs.[378] According to a Nielsen survey in July 2011, 42% of Netflix users used a standalone computer, 25% used the Wii, 14% by connecting computers to a television, 13% with a PlayStation 3 and 12% an Xbox 360.[379]

Netflix supports 30 languages for user interface and customer support purposes: Arabic (Modern Standard), Chinese (Simplified and Traditional), Croatian, Czech, Danish, Dutch, English, Finnish, French, German, Greek, Hebrew, Hindi, Hungarian, Indonesian, Italian, Japanese, Korean, Malay, Norwegian (Bokmål), Polish, Portuguese (Brazilian and European), Romanian, Russian, Spanish (European Spanish and Latin American), Swahili, Swedish, Thai, Turkish and Vietnamese.[380][381][382]

Netflix service plans are divided into three price tiers; the lowest offers standard definition streaming on a single device (and up to 480p quality),[383][384] the second allows high definition streaming on two devices simultaneously (and up to 1080p quality), and the "Platinum" tier allows simultaneous streaming on up to four devices (and up to 4K quality on supported devices and internet connections).

Disc rentalEdit

In the United States, the company provides a monthly flat rate for DVD and Blu-ray rentals. A subscriber creates a rental queue, a list, of films to rent. The films are delivered individually via the United States Postal Service from regional warehouses. The subscriber can keep the rented disc as long as desired, but there is a limit on the number of discs that each subscriber can have simultaneously via different tiers. To rent a new disc, the subscriber must return the previous disc in a metered reply mail envelope. Upon receipt, Netflix ships the next available disc in the subscriber's rental queue.

The DVD rental service is now branded as DVD Netflix.[385]

ProfilesEdit

In June 2008, Netflix announced plans to eliminate its online subscriber profile feature.[386] Profiles allow one subscriber account to contain multiple users (for example, a couple, two roommates, or parent and child) with separate DVD queues, ratings, recommendations, friend lists, reviews, and intra-site communications for each. Netflix contended that eliminating profiles would improve the customer experience.[387] However, likely as a result of negative reviews and reaction by Netflix users,[388][389][390] Netflix reversed its decision to remove profiles 11 days after the announcement.[391] In announcing the reinstatement of profiles, Netflix defended its original decision, stating, "Because of an ongoing desire to make our website easier to use, we believed taking a feature away that is only used by a very small minority would help us improve the site for everyone," then explained its reversal: "Listening to our members, we realized that users of this feature often describe it as an essential part of their Netflix experience. Simplicity is only one virtue and it can certainly be outweighed by a utility."[392]

Reintroduction of the "Profiles" feature on August 1, 2013, that permits accounts to accommodate up to five user profiles, associated either with individuals or thematic occasions. "Profiles" effectively divides the interest of each user, so that each will receive individualized suggestions and adding favorites individually. "This is important", according to Todd Yellin, Netflix's Vice President of Product Innovation, because, "About 75 percent to 80 percent of what people watch on Netflix comes from what Netflix recommends, not from what people search for".[393] Moreover, Mike McGuire, a VP at Gartner, said: "profiles will give Netflix even more detailed information about its subscribers and their viewing habits, allowing the company to make better decisions about what movies and TV shows to offer".[393] Additionally, profiles lets users link their individual Facebook accounts, and thus share individual watch queues and recommendations,[393][394] since its addition in March after lobbying Congress to change an outdated act.[394] Neil Hunt, Netflix's former Chief Product Officer, told CNNMoney: "profiles are another way to stand out in the crowded streaming-video space", and, "The company said focus-group testing showed that profiles generate more viewing and more engagement".[394]

Hunt says Netflix may link profiles to specific devices, in time, so a subscriber can skip the step of launching a specific profile each time they log into Netflix on a given device.[395]

Critics of the feature have noted:

  • New profiles are created as "blank slates",[395] but viewing history prior to profile creations stays profile-wide.[396]
  • People don't always watch Netflix alone, and media watched with viewing partner(s) – whose tastes might not reflect the owner(s) – affect recommendations made to that profile.[394][395][396]

In response to both concerns, however, users can refine future recommendations for a given profile by rating the shows watched and by their ongoing viewing habits.[395][396]

ProductsEdit

 
An Aquos remote control with a Netflix button

Device support and technical detailsEdit

Netflix can be accessed via an internet browser on PCs, while Netflix apps are available on various platforms, including Blu-ray Disc players, tablet computers, mobile phones, smart TVs, digital media players, and video game consoles (including Xbox Series X/S, Xbox One, PlayStation 5, PlayStation 4, Wii U, Xbox 360, and the PlayStation 3). The Wii and the PlayStation 2 were formerly compatible with Netflix as well.

In addition, a growing number of multichannel television providers, including cable television and IPTV services, have also added Netflix apps accessible within their own set-top boxes, sometimes with the ability for its content (along with those of other online video services) to be presented within a unified search interface alongside linear television programming as an "all-in-one" solution.[397][398][399][400]

4K streaming requires a 4K-compatible device and display, both supporting HDCP 2.2. 4K streaming on personal computers requires hardware and software support of the Microsoft PlayReady 3.0 digital rights management solution, which requires a compatible CPU, graphics card, and software environment. Currently, this feature is limited to 7th generation Intel Core or later CPUs, Windows 10, Nvidia GeForce 10 series and AMD Radeon 400 series or later graphics cards, and running through Microsoft Edge web browser, or the Netflix universal app available on Microsoft Store.[401][402][403][404][405]

ContentEdit

Netflix has a Twitter feed, used to tweet about the new and upcoming shows that include hashtags to encourage engagement of its audience to not only watch the show but to contribute to the hashtag themselves.[406]

Original programmingEdit

A "Netflix Original" is content that is produced, co-produced, or distributed by Netflix exclusively on its services. Netflix funds its original shows differently than other TV networks when it signs a project, providing the money upfront and immediately ordering two seasons of most series.[210]

Some Netflix originals are "Bird Box," starring Sandra Bullock in 2018 and "I Care a Lot," starring Rosamund Pike in 2020.

Netflix also invested in distributing exclusive stand-up comedy specials from such notable comedians as Dave Chappelle, Louis C.K., Chris Rock, Jim Gaffigan, Bill Burr and Jerry Seinfeld.[407]

The company started internally self-producing its original content, such as The Ranch and Chelsea, through its Netflix Studios production house.[408]

Film and television dealsEdit

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. Netflix's United States library includes newer releases from Relativity Media and its former subsidiary Rogue Pictures, [409] as well as DreamWorks Animation[410] (until May 2018, when the studio signed a new contract with Hulu),[411] Open Road Films[412] (though this deal expired in 2017; Showtime has assumed pay television rights[413]), Universal Animation (for animated films declined by HBO), FilmDistrict,[414] The Weinstein Company, causing Netflix to withdraw from hosting the 75th Golden Globe Awards with TWC, and ending its Golden Globes partnership with the mini-major film studio[415]),[416][417] Sony Pictures Animation,[418] and the Walt Disney Studios (until 2019) catalog.

Other distributors who have licensed content to Netflix include Warner Bros., Universal Pictures, Sony Pictures Entertainment and 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 Television Distribution, along with titles from other companies such as Allspark (formerly Hasbro Studios), Saban Brands, Funimation, and Viz Media.[419] 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 also previously held the rights to select titles from vintage re-distributor The Criterion Collection, but these titles were pulled from Netflix and added to Hulu's library.[420]

Netflix also negotiated to distribute animated films from Universal that HBO declined to acquire, such as The Lorax, ParaNorman, and Minions.[421]

Producers and distributorsEdit

The following list only applies to the United States. Listed companies may still or may not have licensing agreements with Netflix in other territories.

CurrentEdit

FormerEdit

Interactive contentEdit

Netflix has released some content that is interactive on certain devices,[423][424] allowing the user to make choices that change the story and accompanying video track:

Title Type Released
Black Mirror: Bandersnatch Film[425] December 28, 2018
The Boss Baby: Get That Baby! Animation[426] September 1, 2020
Buddy Thunderstruck: The Maybe Pile Animation[427] July 14, 2017
Captain Underpants Epic Choice-o-Rama Animation[428] February 11, 2020[429]
Carmen Sandiego: To Steal or Not to Steal Animation[430] March 10, 2020[431]
Headspace: Unwind Your Mind Documentary[432] June 15, 2021
Minecraft: Story Mode Animation[433] November 27, 2018
Puss in Boots: Trapped in an Epic Tale Animation[434] June 20, 2017
Spirit Riding Free: Ride Along Adventure Animal Tales[435] December 8, 2020
Stretch Armstrong: The Breakout Animation[436] March 13, 2018
Unbreakable Kimmy Schmidt: Kimmy vs. the Reverend Sitcom[437] May 12, 2020[438]
You vs. Wild Series[439] April 10, 2019

AwardsEdit

On July 18, 2013, Netflix earned the first Primetime Emmy Award nominations for original online-only web television programs at the 65th Primetime Emmy Awards. Three of its web 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).[440] 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 webisode of a television series to receive a major Primetime Emmy Award nomination: David Fincher was nominated in the category of Outstanding Directing for a Drama Series.[440][441] "Chapter 1" joined Arrested Development's "Flight of the Phoenix" and Hemlock Grove's "Children of the Night" as the first webisodes to earn Creative Arts Emmy Award nomination, and with its win for Outstanding Cinematography for a Single-Camera Series, "Chapter 1" became the first webisode to be awarded an Emmy.[442] Fincher's win for Directing for a Drama Series made the episode the first Primetime Emmy-awarded webisode.[443]

On December 12, 2013, the network earned six Golden Globe Award nominations, including four for House of Cards.[444] Among those nominations was Wright for Golden Globe Award for Best Actress – Television Series Drama for her portrayal of Claire Underwood, which she won at the 71st Golden Globe Awards on January 12. With the accolade, Wright became the first actress to win a Golden Globe for an online-only web television series. It also marked Netflix' first major acting award.[445][446][447] House of Cards and Orange is the New Black also won Peabody Awards in 2013.[448]

On July 10, 2014, Netflix received 31 Emmy nominations. Among other nominations, House of Cards received nominations for Outstanding Drama Series, Outstanding Directing in a Drama Series and Outstanding Writing in a Drama Series. Kevin Spacey and Robin Wright were nominated for Outstanding Lead Actor and Outstanding Lead Actress in a Drama Series. Orange is the New Black was nominated in the comedy categories, earning nominations for Outstanding Comedy Series, Outstanding Writing for a Comedy Series and Outstanding Directing for a Comedy Series. Taylor Schilling, Kate Mulgrew, and Uzo Aduba were respectively nominated for Outstanding Lead Actress in a Comedy Series, Outstanding Supporting Actress in a Comedy Series and Outstanding Guest Actress in a Comedy Series (the latter was for Aduba's recurring role in season one, as she was promoted to series regular for the show's second season).[449]

Netflix got the largest share of 2016 Emmy award nominations among its competitors, with 16 major nominations. However, streaming shows only got 24 nominations out of a total of 139, falling significantly behind cable.[450] The 16 Netflix nominees were: House of Cards with Kevin Spacey, A Very Murray Christmas with Bill Murray, Unbreakable Kimmy Schmidt, Master of None, and Bloodline.[450]

Stranger Things received 19 nominations at the 2017 Primetime Emmy Awards, while The Crown received 13 nominations.[451] In April 2017, it was nominated for Broadcaster of the Year in the UK's Diversity in Media Awards.[citation needed] In December 2017, it was awarded PETA's Company of the Year for promoting animal rights movies and documentaries like Forks Over Knives and What the Health.

At the 90th Academy Awards, held on March 4, 2018, Netflix won the Oscar for Best Documentary Feature for the film Icarus. During his remarks backstage, director and writer Bryan Fogel remarked that Netflix had "single-handedly changed the documentary world". Icarus had its premiere at the 2017 Sundance Film Festival and was bought by Netflix for $5 million, one of the biggest deals ever for a non-fiction film.[452] Netflix became the most nominated network at the 2018 Primetime and Creative Arts Emmy Awards with 112 nominations, therefore breaking HBO's 17-years record as most nominated network at the Emmys, which received 108 nominations.[453][454]

On January 22, 2019, Netflix scored 15 nominations for the 91st Academy Awards, including Best Picture for Alfonso Cuarón's Roma, which was nominated for 10 awards.[455] The 15 nominations equal the total nominations Netflix had received in previous years. Its increased presence in the Academy Awards has led filmmakers such as Steven Spielberg to speak out against the nomination of streaming content. As a possible solution, Netflix is in the process of buying Grauman's Egyptian Theatre to host events and screen its films and series.[456] However, there are no plans to roll out full theatrical releases there.[457]

In 2020, Netflix gained 20 TV nominations and 22 film nominations at the Golden Globes awards. It secured three out of the five nominations for best drama TV series for The Crown, Ozark and Ratched and four of the five nominations for best actress in a TV series: Olivia Colman, Emma Corrin, Laura Linney and Sarah Paulson.[458][459] Netflix also gained 30 nominations at the Screen Actor Guilds Awards (won 7 awards)[460] and 35 nominations at the Academy Awards (also won 7 awards).[461]

CriticismEdit

Closed captioningEdit

In 2011, Netflix was sued by the US National Association of the Deaf for not providing closed captioning for the deaf or hard of hearing on all of its content, citing the Americans with Disabilities Act. In October 2012, Netflix agreed to a settlement, whereby it would caption its entire library by 2014, and by 2016, have captioning available for new content within seven days of release.[462] In an unpublished decision issued 2015, the United States Court of Appeals for the Ninth Circuit ruled that the ADA did not apply to Netflix in this case, as it is "not connected to any actual, physical place".[463] Netflix has continued to face criticism from disability rights supporters over the quality of captioning on some of its content.[464][465]

Broadband and energy consumptionEdit

On March 18, 2020, Thierry Breton, the European Commissioner for Internal Market and Services urged streaming services including Netflix to cut back their service to limit the stress on Europe's broadband networks. Confinement measures taken during the COVID-19 Pandemic increased pressure on the networks with people both working and looking for entertainment at home.[466] Netflix responded by agreeing to reduce its streaming rate in the European Union countries by 25% for 30 days. Although the streaming rate was cut by 25%, users were still able to stream in HD and 4K with reduced image quality.[467]

Content and partnershipsEdit

On a panel about the future of film for the New York Times on June 23, 2019, actor and screenwriter Kumail Nanjiani said:

This is very cynical, but I think the standard of quality for people who watch stuff at home is not the same [as it is with theatrical releases].... I don't want to diss on Netflix too much, they make amazing stuff, and they're giving shots to people who would not have been given shots 10 years ago, but I also think Netflix would rather have five things people kind of like than one thing that people really love.[468]

Individual Netflix productions have also faced controversy over content. In 2018, the press argued that 13 Reasons Why glamorized mental health issues such as suicide, depression and post-traumatic stress.[469][470][471] Scholars also accused those productions to minimize the risk of vulnerable viewers[472] pointed out the company's lack of moral responsibility.[473] Netflix was criticized for using stock footage from the 2013 Lac-Mégantic rail disaster in Bird Box and Travelers. The footage was subsequently replaced.[474] In January 2019, Netflix censored an episode of Patriot Act with Hasan Minhaj in Saudi Arabia after requests by the Communications and Information Technology Commission, citing material critical of the country (such as Mohammed bin Salman and the Saudi-led military campaign in Yemen).[475]

The announcement that Gwyneth Paltrow's company Goop had partnered with Netflix led to criticism, noting that the company has frequently been criticized for making unsubstantiated claims about the effectiveness of health treatments and products that it promotes. Multiple critics argued that granting Goop access to Netflix's platform was a "win for pseudoscience".[277][278][279][276]

Netflix's partnership with Liu Cixin, including inviting Liu to join as a consulting producer for a show based on his The Three-Body Problem, raised questions from U.S. politicians.[476] Citing an interview by The New Yorker in which Liu expressed support for Chinese government policies such as the one-child policy and the Xinjiang re-education camps, five U.S. senators wrote a letter to Netflix asking whether it was aware of Liu's remarks and demanding a justification for proceeding with the adaptation of Liu's work.[477][478] Netflix responded that Liu was not the creator of the show, and that Liu's comments "are not reflective of the views of Netflix or of the show's creators, nor are they part of the plot or themes of the show".[479] The letter points to the challenge of whether the U.S. entertainment industry can work with creators in China and tell their stories without accidentally promoting China's propaganda or becoming complicit in human rights abuses.[480]

In April 2021, Netflix announced a new unscripted show called "Hype House."[481] The show would show the lives of TikTok influencers in the house. This was controversial due to some members not taking the COVID-19 pandemic seriously.[482] A few subscribers claimed that they would cancel their subscriptions, and even made petitions to cancel the show.[482]

In 2020, the South African government announced its intention to impose local content requirements on Netflix, to which Netflix responded that it would have to cut its library in order to meet such requirements.[483] Economist Jacques Jonker also criticised the South African government over the issue, asserting that it has no moral justification based on either consequentialist or deontological grounds for imposing such requirements. Jonker also accused the government's proposed content requirement policy of being xenophobic.[484]

Film distribution modelEdit

Netflix's distribution model for original films has led to conflicts with the legacy film industry. Some cinemas have refused to screen films distributed theatrically by Netflix (primarily to ensure awards eligibility), as it defies the standard three-month release window, and releases them simultaneously on its streaming platform (although Roma was instead given a three-week run before being added to the streaming service). Steven Spielberg, governor of the directors branch of the Academy of Motion Picture Arts and Sciences (AMPAS), has been critical of the streaming model over the "communal" cinema experience, but later clarified his views by arguing that viewers should have access to "great stories", and be able to "find their entertainment in any form or fashion that suits them".[485][486][487][488] In April 2019, AMPAS voted against the possibility of changes to the Academy Awards eligibility criteria to account for streaming services such as Netflix, although AMPAS president John Bailey did state that the organization would "further study the profound changes occurring in our industry".[489]

Beginning at the 2019 Toronto International Film Festival, films may now be restricted from screening at Scotiabank Theatre Toronto—one of the festival's main venues—and screened elsewhere (such as TIFF Bell Lightbox and other local cinemas) if distributed by a service such as Netflix. Organizers stated that the restriction was due to a policy enforced by the facility's owner and operator, Cineplex Entertainment, requiring adherence to 3-month theatrical windows.[490]

Tax avoidanceEdit

According to a blog post by the Institute on Taxation and Economic Policy, Netflix reported its largest ever profit in the US for 2018, but paid nothing in federal or state tax.[491] The explanation is that US Tax law allows companies to claim tax credit on foreign earnings and thus avoid double taxation.[492] US Senator Bernie Sanders has criticized Netflix for this both on Twitter[493] and at a Fox News town hall event on April 15, 2019.[494] A spokesperson from Netflix has addressed such claims as "inaccurate", but no evidence has been provided that Netflix did pay any state or federal taxes in 2018.[495]

In 2019, allegations of tax evasion were investigated by Italian prosecutors. While Netflix doesn't have a headquarters in Italy, the prosecution claims that the digital infrastructure such as servers and cables amounts to a physical presence in the country.[496]

Viewership figure claimsEdit

Netflix has been criticised by some media organizations and competitors for only rarely and selectively releasing its ratings and viewer numbers. A notable instance of this involves the film Bird Box. A week after its release, Netflix claimed that it had the biggest seven-day viewing record of any of its original films at over 45 million viewers, but did not provide data to validate it.[497] It also was not possible to accurately compare its week-long success to a major cultural event such as the Super Bowl or Academy Awards or to a blockbuster film run.[498] In June 2019, Netflix claimed that 30,869,863 accounts watched the Adam Sandler- and Jennifer Aniston-starring Netflix original film Murder Mystery, despite it being critically panned, making it the biggest "opening weekend" for a Netflix original film. If the film had been in theaters it would have made the equivalent of $556 million based on a $9 ticket price. Critics cast doubt that this number of people would have watched the film given that it would have made the film more popular than the finale of Game of Thrones.[499]

In the fourth quarter of 2019, Netflix changed the method it used to estimate viewers for a show. Before this, Netflix counted a viewer towards viewership if they watched 70% of the show; with the new change, a viewer need only watch two minutes of the show to count. Netflix started the two-minute metric indicated that the viewer chose to watch the show, and thus counted in its viewership. This also eliminated factors such as the length of the work, so that both short and long works would be treated equally. In a statement to shareholders, Netflix estimated this increased viewership by 35% on average.[500] This new metric was criticized as commentators felt two minutes was far too little of any show to engage a viewer, and instead the move by Netflix was to artificially increase viewership to put their numbers on par with television networks and movie ticket sales, such as trying to compare viewership of The Witcher with that of HBO's Game of Thrones.[501][502]

Political controversiesEdit

Netflix has encountered political controversy after its global expansion and for some of its international productions, including The Mechanism, Fauda and Amo.[503][504] In June 2016, Russian Minister of Culture Vladimir Medinsky asserted that Netflix is part of a US government plot to influence the world culture, "to enter every home, get into every television, and through that television, into the head of every person on earth". This was part of his argument for the increase of funding of Russian cinema to pitch it against the dominance of Hollywood.[505]

In February 2020, the company released its first report of compliance with government-requested content takedowns in countries, a total of 9 times since its launch:[506][507][508]

In India, Netflix along with Disney's Hotstar announced plans in early 2019 to adopt self-regulation guidelines for content streamed on its platforms within the country in an effort to prevent potential implementation of government censorship laws.[513] The Jordanian series Jinn was condemned by members of the country's government for contravening the country's moral standards, and the country's highest prosecutor has sought to have the series banned from streaming.[514] On September 3, 2019, Netflix applied for a license to continue its streaming services in Turkey, under the country's new broadcasting rules. The television watchdog of Istanbul, Radio and Television Supreme Council (RTÜK) issued new guidelines, under which content providers were required to get new license for operating in the country.[515] Netflix was later ordered by the RTÜK to remove LGBT characters from its Turkish original series Love 101 and The Protector.[516][517] Netflix subsequently cancelled the ongoing production of its Turkish series If Only when g ordered to remove a gay character to be allowed release.[518]

Promotion of pseudoscienceEdit

Netflix has long been criticized for offering content that presents wellness pseudoscience and conspiracy theories as true.[519] Health professionals have quickly corrected several arguments made by the 2017 documentary What the Health, arguing the movie exaggerates the negative effects of eating eggs and downplays the risks of a diet rich in sugar.[520] The Australian Medical Association (AMA) called on Netflix to remove from its catalog The Magic Pill, a documentary narrated by celebrity chef Pete Evans claiming a ketogenic diet helps cure a variety of diseases, such as asthma and cancer. While some studies hint that some benefits can be gained from the diet, they did not support the claims made in the movie and the AMA insisted that promoting the diet without the supervision of qualified health professionals posed grave risks of developing nutritional deficiencies.[521]

These accusations intensified in 2020, with the platform presenting original programming such as The Goop Lab and Down to Earth with Zac Efron.[519][522] From the moment it signed a deal with Gwyneth Paltrow's lifestyle brand Goop in February 2019, Netflix faced widespread criticism. The deal was repeatedly described as "a win for pseudoscience."[276][278]}}</ref>[279] Once The Goop Lab was available for review, it attracted harsh criticism.[523][524][525] Efron's show was also heavily criticized for promoting pseudoscience and giving questionable health advice to its viewers.[526][527]

CutiesEdit

Cuties, a 2020 French film distributed internationally by Netflix, drew controversy after its release due to claims it sexualized children, particularly in response to the poster originally displayed on the streaming platform, which was subsequently changed.[528][529] Politicians and government officials in Turkey and the US made various complaints, including calling for the investigation of "possible violations of child exploitation and child pornography laws" and asking for the film to be voluntarily removed by Netflix.[530][531] The film's director, Maïmouna Doucouré, stated in defense of the film that it "tries to show that our children should have the time to be children, and we as adults should protect their innocence and keep them innocent as long as possible."[532][533][534] On September 23, 2020, Netflix was indicted by a Texas grand jury for "promotion of lewd visual material depicting a child".[535]

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Further readingEdit

  • McDonald, Kevin; Smith-Rowsey, Daniel (2016). The Netflix Effect (1st ed.). Bloomsbury Academic & Professional. ISBN 9781501309441.
  • Hastings, Reed (2020). No Rules Rules: Netflix and the Culture of Reinvention. Penguin Press. ISBN 978-1984877864.

External linksEdit