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Netflix

Netflix, Inc. is an American media services provider and production company headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company's primary business is its subscription-based streaming service, which offers online streaming of a library of films and television programs, including those produced in-house. As of April 2019, Netflix had over 148 million paid subscriptions worldwide, including 60 million in the United States and over 154 million subscriptions in total, including free trials. It is available worldwide except in mainland China (due to local restrictions), Syria, North Korea, and Crimea (due to U.S. sanctions). The company also has offices in India, The Netherlands, Brazil, Japan, and South Korea.[13] Netflix is a member of the Motion Picture Association (MPA).

Netflix's initial business model included DVD sales and rental by mail, but Hastings abandoned sales about a year after the company's founding to focus on the initial DVD rental business. Netflix expanded its business in 2010 with the introduction of streaming media while retaining the DVD and Blu-ray rental business. The company expanded internationally in 2010 with streaming available in Canada, followed by Latin America and The Caribbean. Netflix entered the content-production industry in 2012, debuting with its first series, Lilyhammer.

Since 2012, Netflix has taken more of an active role as a producer and distributor for both film and television series, and to that end, it offers a variety of "Netflix Original" content through its online library.[16] By January 2016, Netflix services operated in more than 190 countries. Netflix released an estimated 126 original series and films in 2016, more than any other network or cable channel.[18] Their efforts to produce new content, secure the rights for additional content, and diversify through 190 countries have resulted in the company racking up billions in debt: $21.9 billion as of September 2017, up from $16.8 billion from the previous year. $6.5 billion of this is long-term debt, while the remaining is in long-term obligations. In October 2018, Netflix announced it would raise another $2 billion in debt to help fund new content.

As of March 2020, Netflix offered just under 3,000 film titles for streaming on its U.S. service. This does not include multi-episode titles (series).

Entertainment dominance, presence, and continued growth

Netflix has been one of the most successful dot-com ventures. In September 2002, The New York Times reported that, at the time, Netflix mailed about 190,000 discs per day to its 670,000 monthly subscribers. The company's published subscriber count increased from one million in the fourth quarter of 2002 to around 5.6 million at the end of the third quarter of 2006, to 14 million in March 2010. Netflix's early growth was fueled by the fast spread of DVD players in households; in 2004, nearly two-thirds of United States homes had a DVD player. Netflix capitalized on the success of DVD and its rapid expansion into United States homes, integrating the potential of the Internet and e-commerce to provide services and catalogs that bricks-and-mortar retailers could not compete with. Netflix also operates an online affiliate program, which has helped to build online sales for DVD rentals as well. The company offers unlimited vacation time for salaried workers and allows employees to take any amount of their paychecks in stock options.

By 2010, Netflix's streaming business had grown so quickly that within months the company had shifted from the fastest-growing customer of the United States Postal Service's first-class service to the largest source of Internet streaming traffic in North America in the evenings. In November, it began offering a standalone streaming service separate from DVD rentals. On September 18, 2011, Netflix announced its intentions to rebrand and restructure its DVD home media rental service as an independent subsidiary called Qwikster, separating the DVD rental and streaming services. Andy Rendich, a 12-year Netflix veteran, was to be CEO of Qwikster. Qwikster would carry video games, whereas Netflix would not. However, in October 2011, Netflix announced that it would retain its DVD service under the name Netflix and would not, in fact, create Qwikster for that purpose.

In April 2011, Netflix had over 23 million subscribers in the United States and over 26 million worldwide. In July 2011, Netflix changed its prices, charging customers for its mail rental service and streaming service separately. This meant a price increase for customers who wanted to continue receiving both services. On October 24, Netflix announced 800,000 subscribers had chosen not to continue subscribing in the United States during the third quarter of 2011, and more losses were expected in the fourth quarter of 2011. However, Netflix's income jumped 63% in the third quarter of 2011. Year-long, the total digital revenue for Netflix reached at least $1.5 billion. On January 26, 2012, Netflix added 610,000 subscribers in the United States by the end of the fourth quarter of 2011, totaling 24.4 million United States subscribers for this time period. On October 23, however, Netflix announced an 88% decline in profits for the third quarter of the year.

In April 2012, Netflix filed with the Federal Election Commission (FEC) to form a political action committee (PAC) called FLIXPAC. Politico referred to the PAC, based in Los Gatos, California, as "another political tool with which to aggressively press a pro-intellectual property, anti-video-piracy agenda". The hacktivist group Anonymous called for a boycott of Netflix following the news. Netflix spokesperson, Joris Evers, indicated that PAC was not set up to support the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA), tweeting that the intent was to "engage on issues like net neutrality, bandwidth caps, UBB and VPPA".

In February 2013, Netflix announced it would be hosting its own awards ceremony, The Flixies. On March 13, 2013, Netflix announced a Facebook implementation, letting United States subscribers access "Watched by your friends" and "Friends' Favorites" by agreeing. This was not legal until the Video Privacy Protection Act of 1988 was modified in early 2013.

Rebranding and wider international expansion

In April 2014, Netflix approached 50 million global subscribers with a 32.3% video streaming market share in the United States. Netflix operated in 41 countries around the world. In June 2014, Netflix unveiled a global rebranding: a new logo, which uses a modern typeface with the drop shadowing removed, and a new website UI. The change was controversial; some liked the new minimalist design, whereas others felt more comfortable with the old interface. In July 2014, Netflix surpassed 50 million global subscribers, with 36 million of them being in the United States.

Following the launch of Daredevil in April 2015, Netflix director of content operations, Tracy Wright, announced that Netflix had added support for audio description (a narration track that contains aural descriptions of key visual elements for the blind or visually impaired), and had begun to work with its partners to add descriptions to its other original series over time. The following year, as part of a settlement with the American Council of the Blind, Netflix agreed to provide descriptions for its original series within 30 days of their premiere and add screen reader support and the ability to browse content by description where available.

At the 2016 Consumer Electronics Show, Netflix announced a major international expansion of its service into 150 additional countries. Netflix promoted that with this expansion, it would now operate in nearly all countries that the company may legally or logistically operate in. A notable exception was China, citing the barriers of operating Internet and media services in the country due to its regulatory climate. Reed Hastings stated that the company was planning to build relationships with local media companies that could serve as partners for distributing its content in the country (with a goal to concentrate primarily on its original content), but stated that they were in no hurry, and could thus take "many years".

Also in January 2016, Netflix announced it would begin blocking virtual private networks, or VPNs. At the same time, Netflix reported 74.8 million subscribers and predicted it would add 6.1 million more by March 2016. Subscription growth has been fueled by its global expansion. By the end of the year, Netflix added a feature to allow customers to download and play select movies and shows while offline.

In February 2017, Netflix signed a music publishing deal with BMG Rights Management, where BMG will oversee rights outside of the United States for music associated with Netflix’s original content. Netflix continues to handle these tasks in-house in the United States. On April 17, 2017, it was reported that Netflix was nearing 100 million subscribers. On April 25, 2017, Netflix announced that it had reached a licensing deal in China with the Baidu-owned streaming service iQiyi, to allow selected Netflix original content to be distributed in China on the platform.[88] The Los Angeles Times stated: "Its series and movies account for more than a third of all prime-time download Internet traffic in North America."

On August 7, 2017, Netflix acquired Millarworld, the creator-owned publishing company of comic book writer Mark Millar. It is the first ever company acquisition in Netflix's history. Netflix plans to leverage Millar and his current and future work for future original content. Chief content officer Ted Sarandos described Millar as being a "modern-day Stan Lee". The following week, Netflix announced that it had entered into an exclusive development deal with Shonda Rhimes.

On January 22, 2018, the company crossed $100 billion in market capitalization, becoming the largest digital media and entertainment company in the world, bigger than every traditional media company except for AT&T, Comcast and Disney[102][103] and the 59th largest publicly traded company on the US S&P 500 Index.

On March 2, 2018, Netflix’s stock price surged to a new all-time high of $301.05 beating its 12-month price target of $300.00 and finishing the session with a market capitalization of $130 billion putting it within shouting distance of traditional media giants like Disney ($155 billion) and Comcast ($169 billion). The milestone came a day after British satcaster, Sky, announced a new agreement with Netflix to integrate Netflix's VOD subscription offering into its pay-TV service. Customers with its high-end Sky Q set-top box and service will be able to see Netflix titles alongside their regular Sky channels.

On August 16, 2018, Netflix announced a three-year overall deal with black-ish creator, Kenya Barris. Under the deal, Barris will produce new series exclusively at Netflix, writing, and executive producing all projects through his production company, Khalabo Ink Society.

On August 27, 2018, Netflix signed a five-year exclusive overall deal with international best–selling author, Harlan Coben. Under the multi-million pact, Netflix will work with Coben to develop 14 existing titles and future projects. On the same day, the company inked an overall deal with Gravity Falls creator Alex Hirsch. According to the Global Internet Phenomena Report, Netflix consumes 15% of all Internet bandwidth globally, the most by any single application.

In October 2018, Netflix acquired ABQ Studios, a film and TV production facility with eight sound stages in Albuquerque, New Mexico. The reported purchase price was under $30 million.

In November 2018, Paramount Pictures signed a multi-picture film deal with Netflix as part of Viacom's growth strategy, making Paramount the first major film studio to sign a deal with Netflix. A sequel to Awesomeness Films', To All the Boys I've Loved Before, is currently in development at the studio for Netflix.

Netflix sought and was approved for membership into the Motion Picture Association of America (MPAA) on January 22, 2019, as the first streaming service to become a member of the association.

In May 2019, Netflix acquired the StoryBots children's media franchise as part of a commitment to expand its educational content.

On May 9, 2019, Netflix made a deal with Dark Horse Entertainment to make television series and films based on comics from Dark Horse Comics.

In early August 2019, Netflix negotiated an exclusive multi-year film and television deal with Game of Thrones showrunners, David Benioff and D.B. Weiss, reportedly worth US$200 million. As a result of their commitments to Netflix, Benioff and Weiss withdrew from an earlier agreement with Disney to write and produce a Star Wars film series.

On November 13, 2019, Netflix and Nickelodeon entered into a multiyear content production agreement to produce several original animated feature films and television series based on Nickelodeon's library of characters, in order to compete with Disney's new streaming service Disney+, which had launched the day before. This agreement expanded on their existing relationship, in which new specials based on the past Nickelodeon series, Invader Zim and Rocko's Modern Life, were released by Netflix. New projects planned under the team-up include a music project featuring Squidward Tentacles from the animated television series SpongeBob SquarePants, and films based on The Loud House and Rise of the Teenage Mutant Ninja Turtles.

On February 25, 2020, Netflix formed partnerships with six Japanese creators to produce an original Japanese anime project. This partnership includes manga creator group CLAMP, mangaka Shin Kibayashi, mangaka Yasuo Ohtagaki, novelist, and film director Otsuichi, novelist Tow Ubutaka, and manga creator Mari Yamazaki.


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