Netflix has now become a daily routine in millions of people's life,They created a revolution in the entertainment industry by their subscription based business model,which currently has 182 million subscribers and more than $15 billion annual revenue.Every business and entrepreneur has a story to tell,So what is Netflix story?How did it shaped the existing entertainment industry and achieved epitome of success by driving through innovation.

The story of Netflix began in 1997 which was founded by Reed Hastings and Marc Bernays Randolph. Reed Hastings previously used to run a software company named Pure Atria which used to make debugging software, Randolph used to work as marketing director in the same company,later it was acquired for $700 million in 1995.In 1997,Reed entered entertainment industry by mistake;the thought behind starting Netflix came when Reed after watching Apollo 13 couldn't return the DVD on time because of which he was charged $40 late fee.He identified this problem and came out with an idea to mail DVD'S to customer's home directly at a reasonable price,Along with Randolph the first thing they did was head down to a music store and buy a CD and send it to each other,later they received the CD's without damage and they believed that this idea could indeed work.The pair tried to pitch this idea to several investors and failed over thousand times but they didn't give up on this and Netflix grew slowly.It became a DVD mail rental service company which was soon at the verge of collapsing,they used to offer DVD rental at $16 in which customers can hold upto 4 DVD's.Initially,they incurred huge losses which was around 57 million dollars.
Later in 2000,they made a proposal to blockbuster to acquire Netflix for $50 million,in which they kept condition to dissolve Blockbuster name and change it into Blockbuster.com to start online streaming when the dotcom boom was in initial phase. John Antioco,Then Blockbuster CEO laughed Netflix out of their office.

In 2003,Netflix crossed 10 million subscribers and started making profits.Blockbuster copied their mail service business model and practiced it for long time,that time Netflix CEO said "Blockbuster has thrown everything but kitchen sink at us";when blockbuster CEO heard this,they delivered kitchen sink to their office.It is true that pride is the mother of arrogance,Blockbuster were deep dwell in their pride that they couldn't recognize the transforming business environment.For a long period Blockbuster was growing and made huge profits.Later,In 2007 James Keyes was appointed as CEO,He took some decisions that were adverse and gave a wrong direction to the company.James wanted to make Blockbuster into a retail business rather than an entertainment one because of which they didn't see the value of growing online entertainment business.The new CEO lost 85% of company's value in 3 years and later in 2010 they filed for bankruptcy.On the other hand Netflix business was thriving as they started video on demand service and made agreements with production houses to stream movies on their platform.

The reason behind Blockbuster fall was ignoring innovation and sticking to past pride and success,they didn't change their business model with changing times.Netflix business model teaches us that you should have a bigger plan,understand the changing trends,keep innovating and grab the opportunities.Most important is the leadership failure which blockbuster had, The CEO didn't take decisive step to acquire Netflix in order to grow and survive in the industry.

John Antioco,Former Blockbuster CEO
who turned down the proposal of acquiring Netflix

James Keyes,Former Blockbuster CEO

Netflix has come a long way,From being a company that struggled to survive initially and faced with constant challenges along the way.What kept them going was their constant innovation and adaptation,It started off as a DVD rental company and then evolved into online streaming of movies and further coming up with their own production house which makes movies and series,coming up with award winning content month after month and thus offering us a vivid entertainment experience.

Reed Hastings and Marc Randolph, Netflix Co founders