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Netflix

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DOI: 10.4135/9781483375519.n460

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The SAGE International Encyclopedia of Mass
Media and Society
Netflix

Contributors: Gordon B. Schmidt

Edited by: Debra L. Merskin
Book Title: The SAGE International Encyclopedia of Mass Media and Society
Chapter Title: "Netflix"
Pub. Date: 2020
Access Date: December 12, 2019
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks,
Print ISBN: 9781483375533
Online ISBN: 9781483375519
DOI: http://dx.doi.org/10.4135/9781483375519.n460
Print pages: 1204-1205
© 2020 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online
version will vary from the pagination of the print book.
SAGE SAGE Reference
© 2020 by SAGE Publications, Inc.

Netflix, founded in 1997, is a global streaming video service with over 125 million subscribers in over 190
countries that can be accessed on computers, cellphones, tablets, and televisions. While Netflix began as a
U.S.-based service, it soon expanded globally, starting in 2010 with Canada. While the United States is Net-
flix’s top market, it has high user bases in Canada, Europe, and Australia. Netflix’s streaming video service
has over 1,500 television shows and 4,000 movies across a wide range of genres. Subscribers are able to
watch as many programs as they want and have full access to the catalog of titles Netflix has licenses to in
their country.

Netflix not only licenses video content created by others but also finances original and exclusive content
with 700 original television shows on the service. Netflix planned to release about 80 new original films
during 2018. Netflix’s original content has won major awards such as Primetime Emmy awards, Golden Globe
awards, and an Academy Award. The company still runs a physical DVD rental service in the United States,
where subscribers can get DVDs sent to their homes. This entry provides an overview of Netflix, including its
development, unique features, and controversies related to its streaming service.

Development
Netflix was founded in 1997 by Reed Hastings and Marc Randolph as a U.S.-based postal DVD rental service
where requests were made through their website. In 1999, Netflix adopted a monthly subscription model:
Subscribers could have an unlimited number of rentals at a single monthly rate. The only restriction placed on
subscribers was how many DVDs they could rent at a time, with different monthly subscription rates based on
the number of DVDs a subscriber could have at one time. The other functional restriction was the number of
copies of a DVD possessed by Netflix, as users potentially had to wait for titles where demand was beyond
supply. Netflix has remained in the DVD business, but it is now under a separate website: dvd.com. It includes
Blu-ray DVDs in its library as well.

In 2007, Netflix began video streaming services in the United States. Initially, the streaming service in the
United States came bundled with the DVD service, although that stopped in 2012. Netflix streaming services
expanded internationally starting in 2010 with Canada and are available in over 190 countries. Netflix has
been highly popular globally. In terms of user penetration, defined as the number of people in a country who
have watched Netflix at least once during a month, the United States has the highest rate (64.5%) but Swe-
den, Denmark, Canada, and Norway all have over 50% user penetration. Netflix does lag behind competitors
in India and has had slow growth in China.

The content for streaming is primarily made up of media content collections licensed from other media com-
panies, although an increasing portion is original content created specifically for Netflix. For programs made
outside the United States, a number have been exclusively licensed for Netflix in the United States and have
appeared on the site under the Netflix Original banner. The content available on Netflix varies by country due
to differences in licensing agreements for different countries and regions.

Features and Aspects

A major aspect of the Netflix service has been its focus on making it easy for users to find programs they will
like. The first basic way this is done is through having a number of different categories that users can browse.
These can include genres like science fiction as well as types of content like television or movies. Netflix also
has a category for what programs are currently trending on Netflix, which means that those programs are
currently popular with users.

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The second, and more technologically complicated, way Netflix helps users find programs to watch is through
a personalized recommendation system. Based on what the user has viewed and his or her ratings on pro-
grams on the site (formerly in a five-star rating format and now a thumbs-up or thumbs-down format), Netflix
recommends other programs to view. This can be presented in terms of categories added that show pro-
grams similar to programs the user has already watched (e.g., “Because you watched The IT Crowd”). These
suggestions can also come in the form of programs in very specific categories that fit with shows a user has
watched in the past (e.g., understated movies). Netflix has over 3,000 of these more specific program cate-
gories which are only shown to a user if he or she has watched or liked films in that category.

As well, Netflix provides personalized artwork for a series based on user viewing habits. The header image
for a television show, for instance, might focus on one of the user’s favorite actors in the series or focus on
the romantic elements of the series if the user prefers that genre. Netflix allows multiple user profiles with one
subscription, so that different members of a household can view programs under their own user profiles and
get recommendations targeted to them.

Netflix has worked to build a catalog of exclusive content to pair with its licensed library of programming. This
began with coproductions with production companies outside the United States where content was exclusive
to Netflix and the partner production company. The first of these was Lilyhammer, which premiered on televi-
sion in Norway in January 2012, followed quickly by a Netflix premier in February 2012. Such coproductions
continue to be part of the site’s exclusive content strategy. Netflix also has done self-commission and exclu-
sive to Netflix series, the first being House of Cards in 2013, which also was the first online-only web television
series to receive nominations for major Emmy award categories. Netflix has also commissioned new seasons
or sequels to series that have previously aired on traditional television outlets. Examples include new sea-
sons of the show Arrested Development and a sequel to the show Full House called Fuller House. Netflix has
created its own production house for creating content called Netflix Studios. Original and exclusive content
has been positioned as a major part of the strategy of Netflix going forward, with a future goal of having half
of Netflix’s overall programming consist of Netflix original content.

Controversies
Netflix has been the subject of complaints from Internet providers. The success of Netflix means that its pro-
gramming constitutes a major part of the bandwidth used by many Internet consumers. Internet providers
have tried to limit the speed of Netflix streaming and to potentially require Netflix to pay providers for the sig-
nificant amount of bandwidth it requires on their services. Traditional media companies have also complained
that Netflix is a major cause of the decline of traditional pay-TV bundles and that it is creating a content mo-
nopoly. This has led to a number of traditional media companies creating their own streaming video services,
often taking their content off Netflix. The result has been a fragmentation of major media content collections
across a number of streaming services.

See also Media Entrepreneurship; Streaming Media; Television Production; Television, History and Econom-
ics of

Gordon B. Schmidt

• United States
• DVD
• television shows
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• videos

http://dx.doi.org/10.4135/9781483375519.n460
10.4135/9781483375519.n460

Further Readings
Burruss, L., & Goldman, D. (2011, October 10). Netflix abandons plan for Qwikster DVD service. CNN Money.
Retrieved from http://money.cnn.com/2011/10/10/technology/netflix_qwikster/index.htm
Chandrashekar, A., Amat, F., Basilico, J., & Jebara, T. (2017, December 7). Artwork personalization at
Netflix. Netflix Technology Blog. Retrieved from https://medium.com/netflix-techblog/artwork-personalization-
c589f074ad76
Rodriguez, A. (2017, August 29). Netflix was founded 20 years ago today because Reed Hastings was late re-
turning a video. Quartz. Retrieved from https://qz.com/1062888/netflix-was-founded-20-years-ago-today-be-
cause-reed-hastings-was-late-a-returning-video/
Wayne, M. L. (2018). Netflix, Amazon, and branded television content in subscription video on-demand por-
tals. Media, Culture & Society, 40(5), 725–741. doi:http://dx.doi.org/10.1177/0163443717736118

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