Netflix, an Entrepreneurial Company
Nov 10th, 2011 by davidjhinku
Netflix has taken a lot of heat in the past few months over mistakes made in the companies direction, from increasing the price to the introduction of the ill-fated Quickster. Nevertheless, this dot-com company has seen great success through its establishment in 1997 and turning its first profit, $6.5 million, in the 2003 fiscal year. The companies Marc Randolph, Reed Hastings and Mitch Lowe have demonstrated all four elements of entrepreneurial success in their Netflix venture.
The company has demonstrated high profitability since its first profit of $6.5 million in 2003 to its latest quartly profit of $285 million despite having lost nearly 800,000 subscribers.
During these past 8 years of profitability Netflix has seen its profits soar; growing year over year from $6.5 million in a year to $285 million, all in the span of 8 short years.
At the time of its establishment, video rental stores were the only conceivable option to rent a DVD. Netflix founders decided to try a completely new approach and price scheme to get the same DVD’s to customers and their risk paid off as customers widely adopted the new service.
Lastly, Netflix took a service that was already in place, renting DVD’s, and completely revamped the delivery method with an innovative new model. Delivering the DVD’s to customers with the new price scheme of monthly payments for unlimited rentals and no late fees faired well with consumers and gave Netflix its success.
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