The first disc Netflix ever mailed to a customer, in March 1998, was Tim Burton’s horror comedy Beetlejuice. Nobody involved could have guessed that the red-envelope business would end up bidding for a Hollywood studio.
Two founders and a test envelope
Reed Hastings and Marc Randolph founded the company in August 1997 in Scotts Valley, California. Randolph had been a marketing director at Hastings’ software firm, Pure Atria, which Hastings sold to Rational Software that year for $700 million. Hastings put $2.5 million of his own cash into the new venture. The pair had first considered VHS cassettes, then settled on DVDs and tested the idea by mailing one to their own homes in Santa Cruz. It arrived intact.
The website launched in 1998 with a few staff and just under 1000 titles. Early customers paid around $4 per rental plus $2 postage. In 1999 Netflix moved to a subscription, and by 2000 it offered flat-fee unlimited rentals with no due dates or late fees. That same year it introduced a recommendation system that predicted tastes from members’ earlier choices. Blockbuster, the dominant rental chain, was approached about a partnership and passed. It filed for bankruptcy in 2010.
Netflix went public on the Nasdaq in 2002 at $15 a share, with 600,000 members in the United States. By 2004 membership passed 2 million, and it reached 4.2 million in 2005.
The streaming turn
In 2007 Netflix began streaming over the internet. Britannica notes that it partnered with makers of game consoles, Blu-ray players and other electronics so the service would play on their devices. A streaming-only plan arrived by 2010, an iPhone app the same year, and expansion into Canada, Latin America, the Caribbean and Europe by 2012. The company counted more than 190 countries and territories by 2016.
Making its own shows
As streaming became its main source of revenue, Netflix turned to original productions in 2013. House of Cards won three Primetime Emmy Awards in its first season. By 2023 the company boasted more than 3,600 original titles. The Crown, Stranger Things and Squid Game followed, each collecting awards. In 2022 Netflix said it would crack down on password sharing, noting that more than 100 million households were sharing logins. The crackdown was credited with lifting subscriber numbers, and the company said it added 8.8 million subscribers worldwide in the third quarter of 2023.
Live events came next. Netflix started livestreaming in 2023 with a Chris Rock stand-up special. In January 2024 it announced a 10-year deal with World Wrestling Entertainment to stream Monday Night Raw from 2025.
The Warner Bros. Discovery bid
In December 2025 Netflix agreed to buy the studio and streaming divisions of Warner Bros. Discovery in a deal valued at about $72 billion, or roughly $82.7 billion including Warner’s debt. Paramount Skydance answered days later with a hostile $30-a-share all-cash offer. On February 24, 2026, Paramount raised its bid to $31 a share and added a $7 billion regulatory termination fee. Warner’s board judged that a superior offer under its merger agreement with Netflix. Two days later Netflix declined to match, saying the higher price was no longer financially attractive. Warner shareholders approved Paramount’s acquisition in April 2026.
Sources
- Netflix | Company, Streaming, History, & Awards | Britannica Money
- From DVDs to streaming, here's the incredible history of Netflix
