History

History

Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software along with Mitch Lowe. Randolph was a co-founder of a computer mail order company by the name of MicroWarehouse. Later he was employed by Borland International as vice-president of marketing. Hastings, once a math teacher, had founded Pure Software, which he had recently sold for $700 million. Hastings invested $2.5 million in start up cash for Netflix. The idea of Netflix came to Hastings when he was forced to pay $40 in overdue fines after returning Apollo 13 well past its due date. The Netflix website was launched on August 29, 1997 with only 30 employees and 925 works available for rent and brought a more traditional, online pay-per-rental model (US $4 per rental plus US $2 in postage; late fees applied). Netflix introduced the monthly subscription concept in September 1999, and then dropped the single-rental model in early 2000. Since that time the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per title rental fees.