Newsroom
In 1997, Reed Hastings experienced something familiar to '90s folks. He rented a video tape but forgot to return it, resulting in a $40 charge from the video club. This incident sparked the creation of Netflix, a company with 238 million subscribers and a market value of about $185 billion.
The movie that triggered it all was "Apollo 13" with Tom Hanks, as Hastings revealed later. He admitted that he didn't want to face his wife's anger for the $40 charge, leading him to ponder a better business idea while at the gym.
The concept was simple: paying a monthly fee of $30 to $40 for unlimited access to a gym inspired Hastings to think about unlimited movie rentals. This concept laid the foundation for Netflix, founded on August 29, 1997, by Hastings and entrepreneur Marc Randolph.
Netflix initially sent DVDs to customers via mail in red envelopes. Subscribers created a list of movies on Netlfix.com, and the company sent the next DVD once the previous one was returned. Users could keep the movies as long as they wanted without extra charges beyond their subscription.
Hastings was an early believer in streaming, offering this option even during the internet's early days. However, Netflix's true breakthrough came with original programming, spearheaded by Greek-born program manager Ted Sarandos. Sarandos eventually became Netflix's co-CEO and a major figure in Hollywood.
