#TBT: The Dawn of the Streaming Wars

The streaming wars didn’t start this month with the launch of Apple TV Plus and Disney+. They actually began 12 years ago...

Paving the way for online television

Netflix, a name that combines the internet and movies, was once such an improbable idea that many thought, “that will never work,” inspiring the generation of media consumption. The company not only worked, it worked beyond their wildest dreams. It would eventually revolutionize TV, herald the era of binge-watching and upend Hollywood’s long-established order. Netflix poured vast sums into original TV series and films and became the undisputed king of streaming, with more than 151 million subscribers in nearly 200 countries.

Digital delivery was both a threat and an opportunity for the company in the 2000’s. If they ignore it, it's a threat, if they take advantage of it, they could improve the former service to offer the best of DVD, the best of online. Once they combined those it became a huge asset. To keep pace with the demand for online movie delivery — and helping ensure the company's very survival - NetFlix unveiled "Watch Now," a service to view movies through their website. At the time the current service didn’t replace the old NetFlix model. The allotted viewing time — between 6 and 48 hours — and tied to how much customers already pay for their mailed DVD rentals.

One major drawback was that the system it only worked with Microsoft's Windows. In the beginning movies couldn’t be watched on cell phones, TVs or video iPods, let alone computers that run on MacOS. Windows was the starting place because it was by far the largest market. With an open platform Netflix certainly expanded the platform base. Reed Hastings, Netflix CEO realized early that an internet delivery platform would eventually supplant mailed DVD rentals, although he felt that could take up to five years. Netflix currently has more than 60 million paying domestic subscribers, and Hastings believes they can get to 90 million, but the risk of market saturation is real, and raises difficult questions for the company's content strategy.