Started some 17 years ago, the digital streaming service Netflix almost didn’t make it. Today, the uber-popular platform has some 100 million subscribers and is an unbelievably successful company that has created a method to search for movies and digital originals from your home and/or mobile device. Their success has spawned copycats all over the globe, and many big name players are now trying to emulate Netflix’s success.
Getting in at just the right time, then working with the improvements in technology and ever-increasing Internet speeds, Netflix was the first to market, then shifted gears and is now considered one of the best advancements in movies and television, helping users cut the cord on their cable bills and instead switch to binge-watching their favorite programs.
As you read this article, understand that you are probably one of the many Netflix users out there. But, like most Netflix users, you may have only scratched the surface of understanding what the service can do, where it came from, why it’s set up the way it is, and what it really offers. To help make sure that you’re a pro about everything Netflix, we’ve come up with a list of 15 things you should probably know.
Some of these things will improve your experience when using the service. Others won’t change a thing but simply provide educational nuggets that you might find quite interesting when you consider just how Netflix came to be what it is today.
Next time you’re at a party or sitting down with a friend watching Netflix, spill one of these tidbits of wisdom upon them and you’ll blow everyone’s mind. Okay, maybe blowing their mind is a bit dramatic. But, it’s still pretty cool.
15. Started As A Mail Order Service
This is one that quite a few people knew but newer users might not have realized. The digital streaming service you know Netflix to be today didn’t start out that way. Initially, the idea was to deliver DVDs by mail order to people’s homes. They could rent up to a certain amount of movies, keep them as long as they wanted, and then mail them back. The idea was meant to combat the traditional video store rental blueprint that customers would spend $4-$5 to rent a video for one day and then have to return it whether they got a chance to watch it or not.
The logic behind the business model made sense but the business was extremely expensive to run and there was a limit on the number of movies that could be shipped since many customers wanted the same DVDs. Had the business model stayed this way, Netflix would have been doomed to fail.
14. They Tried To Sell The Company To Blockbuster In 2000
Knowing that Blockbuster Video lost millions of dollars and nearly every store has folded because digital streaming services made renting movies an obsolete idea, it would probably shock most people to hear that Blockbuster had an opportunity to control their own fate when Netflix offered to sell the company to Blockbuster in the year 2000. The founders of Netflix walked into the video rental giants offices and asked them to buy Netflix. Blockbuster declined.
The reason why Blockbuster said no is because the owners of Netflix wanted $50 million, and Netflix wasn’t worth nearly that much at the time. When the founders of Netflix offered to sell, they were losing money and Blockbuster didn’t see it as a business they could make profitable. The digital end of the service wasn’t really a serious option at that time and based on that decision, Blockbuster probably made the right call. When digital streaming became an option, it changed everything. Now, Netflix is worth tens of billions and Blockbuster is pretty much dead in the water.
13. Founder Said He Started Netflix Over $40 Worth Of Late Fees
There’s a story that exists citing the founder of Netflix suggesting that he started the company because he was once charged $40 in late fees at a Blockbuster Video when trying to return a VHS of Apollo 13 he’d forgotten he had. It’s a great story because it effectively demonstrates the issue with traditional video rental services and provides a justifiable reason to try something different.
The only problem is that the story isn’t true. It was a more convenient way to quickly answer a question one of the founders was getting on a regular basis. Instead of going through long and drawn-out details of why and how the company came to be, the late fees story was just easier for everyone. Many people still believe this is the reason why Netflix began but it isn’t.
12. Has Over 75,000 Micro-genres
Usually, users of Netflix will search for movies by going through and picking by genres or accepting recommendations off their feed. Only looking for titles in that way severely limits a subscriber’s ability to see what’s actually available to watch. The reality is, when it comes to how Netflix sorts and organizes their multi-thousand strong video library, the genres are much more detailed.
Netflix has data on everything. So when they sort their titles, they go much deeper than the average user. The service has over 75,000 micro-genres they use to categorize their options, and you’ll find anything from searchable actors to viewer history to things like YouTube sensations and cool mustaches. Don’t forget, there are Kevin Spacey movies pre-House of Cards, high school musicals, and films with cute talking babies. If you can think of a category, Netflix has probably already used it to sort their films. The company has actually hired people whose sole job is to tag titles with categories subscribers might think of.
11. Netflix Tracks Everything You Do With The Service
One of the reasons why Netflix is so successful is because it tracks the data on everything that happens on its platform. It doesn’t just know the movies or original programs its users watch, but it knows how long they watch, when they pause, when they come back to watch more, which films they quit watching, and countless more statistics that are a major factor in making key decisions.
Netflix chooses programs based on the patterns they recognize from subscribers. This information is often passed on to those who create content on the service so that they can produce material they know subscribers will watch. They also know if you’re lying when you rate a movie high because you want to feel more cultured. How? They can see that you didn’t actually watch it.
Basically, all you have to remember is that the information Netflix has on you and the way you watch movies and television programming is unprecedented in Hollywood. They know way more about than you know about them.
10. Chooses Originals And Greenlights Multiple Seasons At A Time
Because Netflix has so much data on pretty much everything, they can greenlight projects in a much different fashion than traditional movie studios or broadcast networks. Ever see a Netflix original that feels a lot like a popular film that’s already been in its library? There’s a good reason for that. They know you’ll watch it.
It is for this reason that Netflix will often greenlight multiple movies from one actor or originals for more than one season. They’re not worried because they have the evidence to show that they have a winner before they ever produce it. This was how they knew House of Cards would be a hit and why they were completely comfortable outbidding every other network for the show. They had Kevin Spacey and David Fincher in mind specifically based on how popular both were on other Netflix content that included them.
9. No Concern For Time
There are real restrictions for producers who make films and television shows on regular platforms. The length of a production or duration of an original is a huge factor, and advertising, network schedules, and other concerns become a part of how each film or episode is created. For example, if you’re creating a 30-minute comedy for Fox, NBC, or ABC, you have to consider the content you can squeeze into one show. On Netflix, there is no such time concern and their subscriber base gives them guaranteed revenue to be flexible.
An episode of Fuller House can be 28 minutes in Episode 1, 24 minutes in Episode 2, and 31 minutes in Episode 3. It simply doesn’t matter because there are no sponsors, there is no network schedule, and they know that most users will binge-watch most of their original programming anyway. Much less is left on the cutting room floor.
8. How To Find Secret Categories
In 2006, Netflix announced that they would give someone $1 million if they could come up with a better algorithm and way to sort, tag, and stream the content for the users. A team of seven guys actually did so and won the money. Netflix appreciated the effort but deemed that it was too costly to implement with not enough potential return so they declined the option to use it in their system.
Since things didn’t change, today, taggers still receive an over 36-page manual on what to do when sorting movies and subscribers can take advantage of this system and search for these smaller categories quite easily. When you browse, simply change the last numbers of the URL. http://www.netflix.com/browse/genre/### is something you might see. Replace the #’s with a different combination and your search options are completely changed.
7. Wicked Employee Perks
You’re not getting mega-rich working for Netflix when you first start out but you’re not getting screwed either (they pay about $18 per hour). As an employee, however, you have some of the best perks on the planet. Their company-wide motto is “act in the best interest of Netflix.” Anything else is pretty much okay by their standards.
If you want 20 days off in a row, you got it. If you need to leave early, you can. The company believes that by hiring good people and letting them make grown-up decisions that are best for the company, people won’t take advantage of that freedom. It’s not the type of approach billion-dollar corporations tend to take but it seems to work well for Netflix. Of course, like a grown-up, you need to arrange these perks and there are consequences for abusing privileges, but it makes for a much more comfortable and trusting work environment. Employees also get a free subscription to the service.
6. Netflix Takes Up A Whole Lot Of The Internet
The users on Netflix, at any given moment, can account for over one-third of the Internet traffic in many countries. It is by far the platform that requires the most usage, and it is why certain times of the day mean slower service or a pixelated viewing of their programming. In any one household, Netflix will be the reason why people use most of their bandwidth from Internet providers, and it’s one of the reasons why the company now offers downloadable options so that users are not streaming content 24 hours of the day.
This is especially true since one account can have multiple users watching different titles at any one time. You can actually adjust the amount of data you use by logging into the settings section of your account and adjusting playback quality to a lower resolution. Your image won’t be as clear, but it’s a lot less taxing on your data plan.
5. Doesn’t Care If You Share Your Account
The massive amount of subscribers is only the start of what makes Netflix so impressive. When you consider that the company is well aware that their clients share their Netflix passwords with other people who have not paid for the service, you then begin to realize that there should be millions more subscribers who are not accounted for but are actually using the service.
Netflix doesn’t seem to care. Their philosophy is that if users are on Netflix, they aren’t on something else and that eventually, getting hooked on shows will be enough to finally get many of those illegal users to switch over to legal accounts. Netflix smartly added an option to pay an additional fee so that a subscriber could add more users to their account. It means that they won’t be kicked off the service because all their friends they gave passwords to are also using the account all at once. If you want to change your mind on who you share with, you can log into your account and locate your viewing history to find out if anyone is piggybacking on your account.
4. Chooses Some Programs Based On What’s Being Illegally Streamed
Netflix employs people whose sole job it is to find out and data log how much illegal content is being downloaded by users who are trying to cheat the system by using torrents or other services to watch movies and television programs. They also have employees who simply track the most popular shows on websites around the world. Once these folks find out what everyone is watching, their job is to report that information back to Netflix so that they can decide what kind of shows they should produce next.
Game of Thrones is the most illegally downloaded show in the history of television shows. As such, part of the reason why Marco Polo was produced was because it offered a similar premise on the Netflix platform that they believed people would watch. The shows aren’t always as good, but Netflix is confident that they’re producing a winner when they know people break the law to watch something similar.
3. Originally Called Kibble
Before Netflix became Netflix, it was originally named Kibble. The website was kibble.com and it was named after co-founder Marc Randolph’s dog. The idea behind the name was to be a constant reminder that it doesn’t matter what the company does or creates as long as the dog will eat the dog food. Meaning, they need to choose titles and create content that the users will actually watch.
This theory is still in practice today. While many people complain about the Adam Sandler movies on the Netflix platform, he’s one of the most popular searchable options and watched titles among all options on the service. It’s why he was given a 4-film deal. Netflix knows that even if people say they hate Sandler, they watch him over and over again. In this case, the dogs are eating the dog food.
2. Producers And Directors Have Much More Creative Freedom
People who produce movies and television shows are attracted to Netflix for one very important reason. They have absolute freedom. There is no rating they need to worry about, no time limit, no shooting schedule they can’t adjust, and no need to create hooks at the end of any one show or film to get viewers to keep watching the next one.
Producers are aware that most subscribers will binge-watch a show if it’s good. That’s literally their only concern. Sometimes, producers and actors can get projects greenlit without having to write a pilot simply because Netflix has the research to show that the people involved make good content and that subscribers watch it. They don’t need proof beforehand and producers love that. To Netflix, if you’ve proven it before, they trust you to do your thing and don’t micromanage the process.
1. Their Success Spawned The Birth Of Many Competitors
The sheer and utter success of Netflix and how much money it’s now bringing in naturally spawned competitors to get into the digital streaming and original content programming business. Amazon, Google, Redbox, and now, Facebook are just a few and all are trying their hand at the medium while spending millions of dollars to do so.
Where Netflix might have these others beaten is that the company has been in the game and has gained much more experience over the long haul. Netflix is actually older than Google. And in that time, they’ve learned what not to do. They’ve also won awards and have been recognized for their productions. At the end of the day, if the content isn’t good, no one will subscribe. They have the data to show what viewers are doing and that took a long time to master.
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