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Netflix is a streaming video service available in more than 40 countries supplemented with a DVD-by-mail service within the United States. It has more than 33 million subscribers as of May 2013.
Netflix was founded in 1997 by Reed Hastings and Marc Randolph who wanted to rent and sell DVDs online. Since DVDs had only been introduced in 1995, they were still relatively rare in brick and mortar video rental stores like Blockbuster, but the entrepreneurs believed the format would eventually replace the bulky VHS. The site opened for business on April 14th, 1998 with a selection of 925 DVDs, including some softcore pornography. 48 hours after the site went live, it had to shut down for a short period of time due to overwhelming demand. The disks could be rented for seven days at $4 each with an additional cost of $2 for shipping. The site also offered DVD purchases for several months before switching to rental-only.
In 2000, Netflix introduced a recommendation system known as CineMatch that utilizes Oracle database systems to cluster similar movies together using information from customer ratings. On October 2nd, 2006, the Netflix Prizewas launched, which encouraged researchers to create a more accurate algorithm for rating titles using a provided training data set of more than 100 million ratings for 17,000 movies. Within six days, someone had achieved a more accurate root mean square error (RMSE) with the data, beating Cinematch’s accuracy score. In June 2009, a group of scientists from across the globe achieved a 10.05% improvement in RMSE over Cinematch, winning the grand prize of $1 million. That September, their algorithms were released online. However, the winning code was never implemented due to the extra engineering costs needed to make it work.
In January 2007, Netflix introduced a streaming video service for PC users, making less than 1.5% of its 70,000 titles available for a limited of hours per month, based on the user’s subscription plan. Within the first six months, at least 2,000 titles had been streamed more than 5 million times. By late 2007, Netflix began testing out unlimited streaming, and by January 2008, all restrictions on streaming service had been lifted. In October 2008, streaming services were opened up to Mac users for the first time. By fall 2009, 42% of Netflix’s 11.1 million subscribers were streaming at least 15 minutes of video.
Netflix launched their first original series Lilyhammer in February 2012, a week after its broadcast premiere on the Norwegian television station NRK1. Starring The Sopranos actor Steve Van Zant, the series detailed the life of a member of the mob who is relocated to Norway on witness protection after testifying against his former boss. Netflix made all eight episodes of the series available for streaming at the same time, setting itself apart from network and cable television by allowing viewers to avoid the wait between episodes..
On February 1st, 2013, Netflix released the pilot season of its second in-house production House of Cards (shown below, left), a political drama series starring Kevin Spacey and adapted from a BBC miniseries and novel of the same name. House of Cards received much positive critical reception, culminating in a special achievement Webby Award for its producers in 2013. Between March and April 2013, Netflix unveiled the comedy series Bad Samaritans, the film Shotgun Wedding and the horror series Hemlock Grove (shown below, right), contributing to more than 2.03 million new streaming subscribers in the first quarter of 2013 in the United States alone. As of May 2013, Netflix has five additional original series in progress, including the highly anticipated fourth season of cult comedic sitcom Arrested Development.
In September 2003, Hacking Netflix was launched to provide the latest news on new releases, movie reviews and news about Netflix itself. In 2008, the first subreddit dedicated to Netflix was created on Reddit, gaining more than 22,000 subscribers as of May 2013. A second Netflix subreddit, /r/NetflixBestOf, was created in April 2010 specifically to solicit recommendations for instantly streamable content. Outside of these communities, many Netflix subscribers have used image macros (shown below, left) on message boards and blogs to express their feelings about the services, most notably on Cheezburger, FunnyJunk and Tumblr. Additionally, there are Quickmeme pages for both Scumbag Netflix (shown below, center) and Good Guy Netflix (shown below, right), each discussing the pros and cons of the service.
On September 18th, 2011, Reed Hasting announced via an email to subscribers that the company would be splitting their DVD rental and streaming services into two separate operations. The DVD rental was to be rebranded as Qwikster, named for quick mail delivery. As the news spread, people sought out Qwikster’s social media accounts, including a Twitter account belonging to a man named Jason Castillo who had no affiliation with Netflix. Though Castillo’s account had been inactive for months, he began tweeting again on September 19th, offering to sell his account.
Within days, a handful of Qwikster spoof Twitter and Tumblr accounts were created, parodying Castillo’s original avatar depicting Sesame Stree character Elmo smoking weed. On October 10th, Netflix announced that they would be abandoning Qwikster and leaving both services under the Netflix brand. Castillo’s Twitter account has not been updated since October 11th, 2011.
Great Netflix Purge
On April 30th, 2013, InstantWatcher.com reported that nearly 1,800 titles including two James Bond titles, fifteen seasons of South Park and a number of classic films would be removed from Netflix’s streaming service on May 1st. Slate confirmed the removal, noting it was due to expiring contracts with studios including MGM, Warner Bros. and Universal. Between April 30th and May 1st, news of the lost titles was shared on Mashable, Gizmodo, Forbes and the Huffington Post. News of the mass removal struck a chord on Twitter, resulting in more than 110,000 mentions of Netflix that day, up from an average of 63,000 mentions per day that week. In a statement to The Verge, a Netflix representative stated that they would be adding more than 500 recent titles on the same day.
By December 2000, slightly more than two years after the site went live, Netflix had 292,000 customers and was shipping more than 300,000 DVDs a week. In February 2003, the company hit 1 million subscribers who were renting an average of 5.5 movies per month from a library of more than 5.5 million discs. In May 2011, four years after introducing its streaming services, Netflix accounted for 24.71 percent of all internet traffic, with viewers using gaming consoles to stream media downloading more than 2.5 GB from the site per day. As of May 2013, Netflix has more than 30 million global subscribers, with more than 10.6 million unique users in the United States per month. Netflix.com has an Alexa ranking of 99 globally and 21 in the US.
Netflix Prize – Grand Prize awarded to team BellKor’s Pragmatic Chaos