Netflix was founded by Reed Hastings and Marc Randolph in 1997. Both of them were technology enthusiasts who had previous experience of setting up websites and running them successfully. Now they had the idea of creating a website where it would be easy for people to buy and rent DVD’s sitting at their homes. Hastings invested $2.5 million in order to get the business started in a big way.
The DVD player was a luxury in the American Household but with the DVD, picture quality was much better. It was also easy to ship these DVD’s as they were small in size and weighed very less. It cost the company only a single first-class stamp in order to send a DVD across
The company started its first day of business on April 14, 1998. The company had 30 employees on its first day and offered nearly 900 titles for rent. The first scheme they offered was a seven-day DVD rental for $4 and an additional $2 for shipping. They also put new titles for sale giving an impressive 30% discount to attract customers. Their website provided users with movie reviews and automatic suggestions to prompt them to rent additional DVD’s.