Hockey Stick Growth Charts

Netflix: Stage-By-Stage: How They Did It

Tinkering/Pre-Start (Pre-1997)

  • Reed Hastings comes up with basic subscription/membership concept after receiving a late fee at Blockbuster
  • Hastings and Marc Randolph launch, Inc. in August of 1997 in Scotts Valley, California
  • Hastings supplies startup cash ($2.5 million) from selling in first company, Pure Software

The Blade Years (1997-2000)

  • April 14, 1998: Opens for business; 30 employees, less than 1,000 DVD titles for rent
  • First business model operates like Blockbuster: rental by mail, but not subscription-based
  • September 1998: Company sells 10,000 copies of Bill Clinton’s grand jury testimony for $0.02 each; gains media coverage
  • December 1998: Announces NetFlix will stop selling DVDs; directs customers to in exchange for publicity on Amazon’s site
  • January 1999: NetFlix partners with All-Movie Guide to direct movie title searches to NetFlix’s website
  • July 1999: $30 million investment from Group Arnault
  • September 23, 1999: Launches subscription service

The Growth Inflection Point (2000)

  • Year 4 growth inflection point: $41,237,464 revenue (grew 607 percent from 1999)
  • NetFlix introduces CineMatch recommendation tool that compares rental patterns among customers and aligns tastes
  • December 2000: NetFlix runs first television ads

Surging Growth (2001-2003)

  • 2001: NetFlix loses $21.1 million for the year, even with a doubled monthly subscription rate, following 9/11/2001
  • 2001: Signs contract with Best Buy that gives NetFlix access to Best Buy locations
  • February 2002: NetFlix attains 500,000 subscribers
  • 2002: Becomes Netflix, Inc. (changes the ‘F’ to ‘f’)
  • May 29, 2002: IPO; Netflix sells 5.5 million shares of common stock for $15/share