How to Trade Netflix (NFLX)

Reed Hastings was charged a $40 late fee for returning Apollo 13 VHS late. Instead of getting angry, he questioned why late fees should exist. He invested $2.5M from selling his previous company Pure Software and tested mailing CDs. When they arrived intact, he decided to build Netflix in August 1997.

Netflix offered to sell itself to Blockbuster for $50M in 2000. Blockbuster’s CEO dismissed it as dot-com hype and laughed it off. Ten years later, Blockbuster went bankrupt while Netflix became a global entertainment giant worth hundreds of billions.

Netflix IPO’d on May 29, 2002 at $15 per share. It had already introduced a subscription model in 1999 (no late fees, unlimited rentals at a flat rate), forcing Blockbuster to eventually copy it. Netflix survived the dot-com crash thanks to strong DVD subscription unit economics.

Netflix launched its 'Watch Now' streaming service in January 2007. Hastings always viewed DVDs as a stepping stone to streaming, waiting for internet speeds to catch up. In 2010, Netflix expanded internationally. In 2011, it attempted to spin off DVDs as Qwikster (failed and canceled within 3 weeks).

Netflix released House of Cards in 2013 as its first original series, launching all episodes at once and popularizing 'binge-watching'. Later hits like Stranger Things, Squid Game, and Wednesday became global phenomena. Netflix won its first Oscar in 2020 and now has 300M+ subscribers worldwide.