Starbucks of Movies: The Story of Netflix || Netflix Effect

Updated: Dec 4, 2020

“The dream 20 years from now, is to have a global entertainment distribution company that provides a unique channel for film producers and studios.”

It was 1999.

Sipping Starbucks coffee, Reed Hastings, the CEO of Netflix said that Netflix would be to movies what Starbucks is to coffee, much before it happened.

And it happened. Netflix changed AV entertainment forever with its transformational service. The number and impact of adaptations that Netflix cast on the AV industry have been revolutionary, so to speak because it impacted almost everything about audio-visual entertainment in the past two decades. As much as I would like to call it the Netflix phenomenon, it’s called the NETFLIX Effect. The effect that the star-making, A-list studios and production houses with big budgets will forever curse.

Background Check

Netflix was originally a DVD rental company that allowed DVD booking online and the DVD was sent through the mail. The story started with a change in the subscription model for DVD booking in 1999. With a monthly fee, people could order as many DVDs as they wanted throughout the month, but at the most 3 in one go. Much like the trial of clothes at many shopping stations.

Walmart and Blockbuster saw the opportunity and jumped into the game, starting a similar version of a DVD rental. Only at a cheaper rate. The perfect marketing hack.

But Hastings visioned differently. He visioned online steaming but the capacity of the internet and price didn’t support a possible and profitable business yet. So there was waaaaaaaaiiiiiiiiiiiit.

And then there was...

Breaking Bubble

Shocker to the big studios with a monopoly over the market is that big-budget promotion was now not the only factor to sell a movie (rent too ). Netflix for the first time provided equal opportunities to all movies (under Netflix contract) to be viewed and recommended, not based on promotion budgets, but on viewer’s tastes, reviews, trends, and other factors.

Prior to Netflix capturing the market, people barely got to hear of low-budget movies. And it’s easy to understand that the greater the money, the greater the hype, and the greater the revenue collection.


It’s crazy to think that 80% of Netflix recommendations are accurate. Behind this lies 29000 lines of code that determine which series or movie will line up in your recommendation list. Here the superstar, the cast, the budget do not matter. What matters is the viewer. And the viewer has a choice. When you choose to quit or prolong the viewing of the series/movie, it helps Netflix know you better. AI is a blessing for such precise customizations.

Talking of Choices

Prior to streaming how much of a choice did we really have with cable connection and a limited number of DVDs in the store? Oh, and there’s something we’ve struggled with for a long time, the fixed show time. There were endless ways you could miss a show. Traveling, important parties, got home late, or power cut? Now people stream Netflix any hour of the day, most importantly (for teenagers), at night.

I could say it brought shows to our phone, but that’s not it. Netflix is on every device suitable for screening. Phone, tab, your lappy, and now even T.V.s aren’t smart without OTTs. And where there’s OTT there’s Netflix.


We can complete watching 2 seasons of a series in two days. Practically pushing all our chores to hindsight, or by sacrificing sleep. Because knowing what happens next is more important than sleep, and is accessible. No need to even click, the next episode autoplays. Damn good to keep the viewers hooked.

Streaming Geniuses & Streaming Community

Are there people around you who seem to have watched every show, and they suggest you best show out of those which you could span to a year of watching if it were up to you? The list of shows makes you dizzy, nonetheless, you manage to watch one or two shows. Primarily the 2 that everybody has been talking about or often gets cited in memes and quotes which is incomprehensible because you haven’t watched it yet.

The latest best performing and classic series are discussion booster among Gen Y and Gen Z groups. So you know it's key to the community.

Popularity Stories

In Hollywood, the overnight success of a movie or an actor is scarce when compared to Netflix. You could get a recommendation of a decade-old flop tv show acquired by Netflix, and when you try watching you love it. You will then urge your friends to watch the show. Netflix too will recommend it to more people. The show will move up the ladder and within a month become a trend. That’s a true story. The Queen's Gambit, La Casa De Papel, and many more.

So goes for the cast of those shows. From an almost unrecognized state they time-travel in a month to being acclaimed worldwide for their performances.

Few numbers

With acquired shows and original high-quality content, Netflix has built a loyal relationship with viewers. It has 195.17 million paid subscribers as of Q3 of 2020. In the U.S., 17 people out of every 20 OTT users, have a Netflix subscription.

Bird Box was the most-viewed original series in 2019 with 80 million views, that’s approximately the total number of tickets sold for Home Alone or Ghostbuster, worldwide. Yes, Netflix does somehow impact theatres, and then comes Covid 19. Meanwhile, most loyal viewers are moving on from their ex (Local cable operators) to a healthier relationship.

And that's how a Netflix dream became a Netflix legend. Now, Netflix is to movies what Starbucks is to coffee. (With the Netflix Effect)

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