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This meant a price increase for customers who wanted to continue receiving both services. 54 On October 24, Netflix announced 800,000 unsubscribers in the United States during the third quarter of 2011, and more losses were expected in the fourth quarter of 2011.

Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California.

The companys primary business is a subscription-based streaming service offering online streaming from a library of films and television series, including those produced in-house.

In January 2021, Netflix reached 203.7 million subscribers, including 73 million in the United States.

It is available worldwide except in the following: mainland China (due to local restrictions), Syria, North Korea, and Crimea (due to US sanctions).

It was reported in 2020 that Netflixs operating income is 1.2 billion.

The company has offices in France, Brazil, the Netherlands, India, Japan, South Korea, and the United Kingdom.

Netflix is a member of the Motion Picture Association (MPA), producing and distributing content from countries all over the globe.

The company expanded internationally in 2010 with streaming available in Canada, 15 followed by Latin America and the Caribbean.

Netflix entered the content-production industry in 2013, debuting its first series House of Cards.

Randolph worked as a marketing director for Hastingss company, Pure Atria.

Randolph had co-founded MicroWarehouse, a computer mail-order company; Borland International later employed him as vice president of marketing.

Hastings, a computer scientist and mathematician, sold Pure Atria to Rational Software Corporation in 1997 for 700 million in what was then the biggest acquisition in Silicon Valley history.

The two came up with the idea for Netflix when commuting between their homes in Santa Cruz and Pure Atrias headquarters in Sunnyvale while waiting for government regulators to approve the merger, 28 although Hastings has given several different explanations for how the idea came about.

Hastings and Randolph considered and rejected VHS tapes as too expensive to stock and too delicate to ship.

When they heard about DVDs, first introduced in the United States on March 24, 1997, 31 they tested the concept of selling or renting DVDs by mail by mailing a compact disc to Hastingss house in Santa Cruz.

When the disc arrived intact, they decided to take on the 16 billion home-video sales and rental industry.

Hastings is often quoted saying that he decided to start Netflix after being fined 40 at a Blockbuster store for being late to return a copy of Apollo 13, but he and Randolph designed this apocryphal story to explain the companys business model and motivation.

Since that time (see Technical details of Netflix ), the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per-title rental fees.

They proposed that Netflix, which would be renamed as Blockbuster.com, would handle the online business, while Blockbuster would take care of the DVDs, making them less dependent on the US Postal Service.

However, sales of DVD players finally took off as they became more affordable, selling for about 200 around Thanksgiving time, becoming one of that years most popular Christmas gifts.

By early 2002, Netflix saw a huge increase in their subscription business.

After incurring substantial losses during its first few years, Netflix posted its first profit during the fiscal year 2003, earning US6.5 million profit on revenues of US272 million.

In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.

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 companys 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.

Netflixs 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 the 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.

Qwikster would carry video games whereas Netflix did 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.

This meant a price increase for customers who wanted to continue receiving both services.

On October 24, Netflix announced 800,000 unsubscribers in the United States during the third quarter of 2011, and more losses were expected in the fourth quarter of 2011.