Despite a torrent of criticism over its plan to raise the prices of its services, Netflix remains one of the most successful companies of recent memory. In April of this year, it reported almost 24-million customers and now has plans to expand into Europe by 2012.
But the firm had an odd beginning.
In 1997, company co-founder Reed Hastings was annoyed by the $40 late fee he was charged for returning a video of the film “Apollo 13” after the due date.
Hastings once told Fortune Magazine: “I remember the fee because I was embarrassed about it. That was back in the VHS days, and it got me thinking that there's a big market out there. So I started to investigate the idea of how to create a movie-rental business by mail. I didn't know about DVDs, and then a friend of mine told me they were coming. I ran out to Tower Records in Santa Cruz, Calif., and mailed CDs to myself, just a disc in an envelope. It was a long 24 hours until the mail arrived back at my house, and I ripped them open and they were all in great shape. That was the big excitement point.”
By the following year, Hastings created Netflix, and it has since become the biggest online DVD rental service.