Netflix

Launch as a mail-based rental business (1997–2006)

Netflix was founded by Marc Randolph and Reed Hastings as a DVD rental service on August 29, 1997, in Scotts Valley, California.

Launched on April 14, 1998, Netflix offered a per-rental model for each DVD but introduced a monthly subscription concept in September 1999, after which the per-rental model was dropped by early 2000. In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.

Through its Red Envelope Entertainment division, Netflix licensed and distributed independent films such as Born into Brothels (2004) and Sherrybaby (2006). In late 2006, Red Envelope Entertainment also expanded into producing original content with filmmakers such as John Waters. Netflix closed Red Envelope Entertainment in 2008.

Transition to streaming services (2007–2012)

Hastings reportedly told Mynette Louie in the late-1990s that his goal was always streaming media, and that Netflix rented DVDs only to grow its customer base for streaming. By the mid-2000s, data speeds and bandwidth costs improved sufficiently, allowing customers to download movies from the internet. The original idea was a "Netflix box" that could download movies overnight and be ready to watch the next day. By 2005, Netflix had acquired movie rights and designed the box and service. But after witnessing how popular streaming services such as YouTube were despite the lack of high-definition content, the concept of using a hardware device was scrapped and replaced with a streaming concept.