February 19, 2023
5-min read

How Netflix built a billion dollar SaaS company

How Netflix built a billion dollar SaaS company

In less than a decade, Netflix has gone from being a DVD rental service to a global SaaS company with over 100 million subscribers. It’s an amazing story of how a company can change and adapt to new markets and new technologies.

Netflix’s success is due to their ability to identify new market opportunities and capitalize on them. When DVDs become popular, they saw an opportunity to build a business around renting and shipping DVDs. As streaming became popular, they saw an opportunity to move into that market.

Now, they are one of the leading providers of streaming video and they continue to look for new opportunities. They are expanding into new countries, creating new original content, and even entering the world of virtual reality.

Netflix is a great example of a company that is always looking for new opportunities and willing to take risks. They have been rewarded with massive growth and a loyal customer base.

Netflix early days

Netflix was founded in 1997 by Reed Hastings and Marc Randolph. They were both software entrepreneurs who had previously founded and sold a software company called Pure Software. Netflix was first founded as a DVD rental service. At the time, DVDs were a new technology and there were few ways to rent or purchase them. 

Netflix saw an opportunity to provide a convenient, monthly rental service for people who wanted to watch movies at home. The company started out small, with only a few employees and a limited selection of DVDs.

Launching their streaming service

2007 was the year that Netflix made a huge shift in their company strategy, and it paid off big time. They launched their streaming service, which was a completely new way of watching movies and TV shows. This was a major gamble, but it paid off in a big way.

Netflix had always been a DVD rental service, and they were doing quite well with that business model. But they saw the future of entertainment was moving towards streaming, and they wanted to be a part of that. They launched their streaming service in 2007, and it quickly took off. People loved the convenience of being able to watch their favorite movies and TV shows whenever they wanted, without having to wait for a DVD to arrive in the mail.

The following year, they expanded their streaming service to include devices like the Xbox 360, Playstation 3, and Apple TV. In 2010, they introduced an app for the iPhone and iPad. In 2013, they expanded their service to include countries in Europe and Latin America.

Content powerhouse

Netflix is a content powerhouse. The company spends billions of dollars each year on content, and it shows. Netflix has a library of hit shows and movies that keep subscribers coming back for more.

Netflix’s success with original content has been well-documented. Shows like House of Cards and Narcos have been huge hits with audiences, and Netflix has invested heavily in marketing these shows to ensure that they reach a wide audience.

What is less well-known is that Netflix also spends a lot of money on acquiring rights to existing content. The company has spent billions of dollars on acquiring the rights to popular movies and TV shows, which it then offers to its subscribers.

This strategy has been successful in attracting and retaining subscribers. Netflix knows that its library of hit movies and TV shows is one of the main reasons why people subscribe to the service, and it is always looking for ways to add more content to its offering.

In recent years, Netflix has been investing more and more in original content. This is in part because original content is less expensive to acquire than the rights to existing content. It is also because original content gives Netflix more control over its destiny.

Original content is a major focus for Netflix, and the company is investing heavily in it. In 2017, Netflix plans to spend $6 billion on content, which is up from $5 billion in 2016. This content will be a mix of original and acquired content, and it will be available to subscribers in over 190 countries.

Netflix’s content strategy is working. The company has millions of subscribers around the world, and they are spending more and more time watching Netflix. In the first quarter of 2017, Netflix members watched over 10 billion hours of content. This is up from 8.25 billion hours in the same quarter last year.

The open-source community

Netflix has been a big proponent of the open-source community, releasing many of its own software projects as open source and contributing to many others. This has helped them build a large ecosystem of developers and users around their products and services.

Netflix runs on a variety of open source technologies, including the Apache Web Server, Cassandra database, and the Hadoop Distributed File System. They have also released many of their own software projects as open source, including the Eureka service discovery system and the Netflix API.

Netflix has been a big supporter of the open-source movement, and their contributions have helped make the open-source community what it is today. By releasing their own software projects as open source and contributing to others, they have created a large ecosystem of developers and users who are familiar with their products and services. This has helped them build a successful business model around their technology.

To conclude

Netflix has long been a DVD rental service, but in recent years they have developed several successful SaaS products that have helped them become a billion dollar company. One of their earliest forays into the SaaS world was with their streaming service, which allows customers to watch movies and television shows online. This service has been a huge success, and has led to the development of other SaaS products such as their mobile app and their video-on-demand service.

One of the keys to Netflix’s success with their SaaS products has been their focus on customer experience. They have worked hard to make their streaming service easy to use and navigate, and their mobile app is designed to be user-friendly and intuitive. They have also made sure to provide a wealth of content for their customers to enjoy, and they continue to add new titles on a regular basis.

Netflix’s success with their SaaS products has allowed them to branch out into other areas, such as original programming. They have also been able to use their data to attract new customers and keep existing ones happy. Overall, Netflix’s focus on customer experience and their ability to continually innovate has made them a leading player in the SaaS world.

Netflix has been successful in building a billion dollar SaaS company by staying focused on their core product, being innovative, and by providing a great customer experience. They have also been able to scale their business by investing in the right technology and partnerships.


We help founders build SaaS products fast. Feel free to reach out.

Posts that may also be of interest to you...