Netflix, a self-proclaimed “world’s leading internet TV service” has seen many ups and downs since its inception in 1997 (Fernández-Manzano, Neira, & Clares-Gavilán, 2016). Netflix has become a key gatekeeper for the distribution of movies (Frey, 2016). The foundation of the company was based on the innovative plan to allow movie lovers the opportunity to rent movies, have them delivered to their home with no associated due dates or late fees (Parnell, 2014). The very early years of the company brought some rough patches. Accroding to Parnell (2014), Netflix reported a staggering loss of $29.8 million dollars in 1999. This loss was related to the high cost of startup and the difficulty of getting their name recognized in the industry (Parnell, 2014). Knowing that they would have to take drastic measures to be successful, the organization developed the Marquee Progam which would ultimately be a huge factor in the success fo the company. The orginal Marquee Program allowed subscribers to pay $19.95 per month to rent one DVD at a time, but to also queue three DVDs to rent in the future …show more content…
The initial response to live streaming was another surge in membership. This is considered by many to be the beginning of a major downfall for Netflix. At this point, according to Beaubien (2011), CEO Reed Hastings announced a plan to split the company into two separate businesses — Qwikster for Internet streaming and Netflix for DVDs by mail; with each maintaining a separate fee structure and separate account to manage. Customers were quickly enraged about this change and the company lost 25 million subscribers (Beaubien, 2011). The lifespan of the Qwikster business was very short; one week after the announcement Hastings halted the formation of the company (Parnell,