15 years and one day ago, Netflix was a company dedicated to renting video and DVD movies. But it wasn’t like video stores, their business model was much more interesting since, for a flat monthly fee, they sent you the movies (including new releases, of course) from their catalog that you requested to your home (in the United States, of course). And, of course, they also took care of its collection. It was like a video store service at home, offered via the Internet, and with this business model it faced the video stores of a lifetime, from the smallest to the, then, gigantic Blockbuster chain.
You read that right, yes, I said 15 years and one day ago, because from 1998 until that day, that was their only business model. Nevertheless on January 16, 2008 everything changed or, to be more exact, everything began to change for the company, since was the date chosen for the debut of its streaming platform, as reported at the time by The New York Times. A service that at that time was secondary to the rental of movies on physical support and that, what’s more, was offered free of charge to its subscribers.
The forecasts of some analysts, as we can read in that article, were quite negative, to the point of forecasting great economic losses for the company and its investors, since it took Netflix away from its main and profitable business activity, the rental of VHS and DVD. It costs me little to imagine those same analysts betting on the bright future of Blockbuster and the like, it is more than interesting to see how things change when analyzed with perspective.
In its first version, the Netflix streaming service was integrated into the web interface for managing the tape and disc request service, and already at that time the company’s executives considered it in terms of “instant gratification”, a concept closely associated with the sale of digital assets over the Internet and which, thanks to Netflix, Spotify and other services, made the leap from sales to subscriptions. Netflix executives knew how to anticipate the future even though, at the same time, some analysts recommended that ordinary investors sell their shares in the company. And an interesting detail about it: a few months after that recommendation, and with the streaming service already operational, the shares had practically doubled their value.
But, beyond actions, investors and others, what is truly relevant is that Netflix has brought video on demand over the Internet the same way that Spotify has given music. Although subscription is a model that also has its detractors, they have reinvented the audiovisual consumption market, providing us with what we want, when we want it, wherever we are, and this deserves our recognition.
