Would you believe that Netflix is almost 20 years old?
Though it launched in 1998, it was only in 2007 that Netflix came up with the idea that would change the way we watch everything. With its DVD-by-mail rental business faltering due to competition from Apple, Walmart, and Amazon (paywall) in digital downloads, Netflix launched the then-revolutionary concept of delivering movies directly to customers’ computers, eliminating the wait time and hassle of receiving and returning discs via post.
The proposition was simple. As a perk on disc plans, subscribers could access low-quality video on demand—far below the resolutions of DVDs and Blu-ray discs—but with the ubiquity of broadband, it could be delivered more quickly and more reliably than on other video platforms. Some proved willing to make the trade, and those who didn’t could still access higher-quality video through Netflix’s disc-rental service.
“Watch Now” started out small with around 1,000 titles—about 1% of Netflix’s 70,000-video physical library—when it began rolling out on Jan. 16, 2007. Videos ranged from Hollywood classics like Casablanca, to cult movies, to foreign films, to mini-series—including the original 1990 BBC series of House of Cards.
The standard $5.99-a-month disc plan bought subscribers six hours of streaming per month. (Today, watching one of Netflix’s own shows like The Crown requires more hours of binge-watching than that.)
With the new service, streaming became synonymous with watching for the first time. The user interface was archaic, but it featured recommendations and a queue where users could dock titles to watch later, showed screenshots on the blog Hacking Netflix. The streaming service was originally thought to be the future of online-movie rentals, CEO Reed Hastings reportedly said when the service launched. But it was TV that Netflix revolutionized.
TV shows steadily took up a larger and larger share of Netflix’s streaming library in the years to come. It began producing its own originals in 2013, starting with its own version of House of Cards, and releasing whole seasons in one go, changing the distribution model for on-demand TV and birthing the concept of binge-watching. Now, in the golden age of TV, such shows make up about 27% of Netflix’s offerings and have eclipsed movies in terms of overall viewing on the platform.
Ten years after streaming video first launched on Netflix, the service has roughly 87 million subscribers around the world, compared to about 4.3 million DVD users. (Netflix’s DVD business is now managed and billed through a separate site, DVD.com.) It offers unlimited viewing, simultaneous streaming across devices, and, as of last year, video downloads. The video quality ranges up to ultra high-definition video. And it boasts thousands of TV and film titles—including more than a hundred of its original series, movies, and specials.
In 2007, Netflix spent about $40 million to build out its data centers and cover the cost of licensing for the initial streaming titles. By comparison, the company allocated $6 billion to content this year.
The company’s stock hit a new all-time high of $135.40 during trading this morning, on the expectation that the platform will only to continue to grow this year.