Netflix has come a long way since the days when it sounded like a dog food.
When the company debuted 20 years ago today, it was called “Kibble” — and it bore little resemblance to the streaming behemoth it is today. Co-founder Marc Randolph explained that the name was supposed to remind workers how hard it was for startups to survive.
“No matter how good the advertising, it’s not a success if the dogs don’t eat the dog food,” said Randolph.
Today, Netflix has turned 100 million of us into dogs, all over the world.
Under the guidance of Chief Content Officer Ted Sarandos and co-founder and CEO Reed Hastings, Netflix jetted past that number of subscribers earlier this year.
It’s coming off one of its most successful quarters in its history, adding more than 5 million subscribers between April and June — normally a slow time of year for the company.
Hastings has said the genesis of Netflix was his embarrassment at running up $40 in late rental fees for a copy of “Apollo 13.” The company killed the old way of renting DVDs by delivering them in red envelopes by mail, then reinvented itself again as a trailblazer of online streaming.
And then it reshuffled the deck again with “House of Cards” — its first major entry into creating its own content, in 2013. Now every company from Amazon to Facebook to Apple is looking for its niche in the content-creation business.
It’s something of a compliment that Disney just decided to pull its content from Netflix and launch its own streaming service in 2019. The Mouse has recognized the strength of Netflix’s business, and is going after its own cheese.
Netflix is the country’s largest streaming service, with YouTube trying to catch up. But on its 20th birthday, it hasn’t lost its startuppy obsession with growth.
It now has more subscribers in the U.S. than cable, and is thinking globally. It now has 52 million international subscribers to 51.9 million subscribers domestically, the first time that balance has tipped.
Michael Olson, a senior analyst with Piper Jaffray, told TheWrap that the company an continue its massive expansion if a few things break in its favor.
“If [Netflix] can get just 5 percent of households outside of US and China that are in the below-average income and 12 percent of households that are above average-income — compared to the 50 percent share of [US] households we estimate they’ll have by 2020 — that’d give them 100 million international subs by 2020,” said Olson. “You don’t need to have huge penetration, and there’s no heroic assumption there — that’s realistic and that’s the biggest potential for them.”
That potential may explain why investors don’t seem too concerned about Netflix’s increasing competition or mammoth $20 billion in debt and obligations.
Netflix has aggressively pushed for that global growth for years. Last year, it went live in 130 countries. And it aims to create content for the world. During Netflix’s second-quarter earnings call, Sarandos pointed to “Okja,” a 2017 action film that was especially popular in director Bong Joon-ho’s native South Korea.
“It helped attract new subscribers but it also brings a brand halo to Netflix that it’s great content worth paying for,” he said.
The global push may benefit from expanded cellular coverage. More viewers are watching on their phones.
“We’ve seen great mobile usage throughout Africa, the Middle East, Asia — that’s been one of the big stories is how much more people live on mobile,” Hastings told the BBC.