Netflix Starts Streaming — From DVDs by Mail to Watching Instantly

Netflix streaming began on 16 January 2007 as an add-on to a DVD-by-mail business. According to that day's announcement, members would keep receiving discs by post from a catalogue of more than 70,000 titles and could now also watch about 1,000 films and TV series instantly on their PCs. The feature was included in the monthly plans at no additional cost, and was to reach every member in a phased roll-out by the end of June.

A Company That Mailed DVDs

Netflix was incorporated in Delaware in August 1997. Its 2002 IPO prospectus says the website launched in April 1998 and the subscription rental service in September 1999, and that the company changed its name from NetFlix.com, Inc. to Netflix, Inc. in March 2002. The prospectus, dated 22 May 2002, offered 5.5 million shares at $15.00 each and described a service with more than 600,000 subscribers.

When streaming was announced in January 2007, DVDs were still the business. The fourth-quarter 2006 results, released on 24 January 2007, reported 6.3 million subscribers, up 51 percent year over year.

In the 2007 announcement chief executive Reed Hastings said the company had chosen the name Netflix in 1998 because it believed internet-based movie rental was the future. Mainstream adoption of online viewing would take years, he said, but it was time to take the first step: "The PC screen is the best Internet-connected screen today, so we are starting there."

What "Watch Instantly" Meant in 2007

The first version of the service looked very different from today's Netflix.

Most selections were to start playing in 10 to 15 seconds, with pause and the ability to jump to any point. The monthly hour caps show where streaming stood: it was a complement to the discs.

2011: Qwikster

The relationship between streaming and DVDs began to flip in 2011. Netflix's 10-Q for the third quarter says that in July 2011 it introduced DVD-only plans and separated unlimited DVDs by mail and unlimited streaming into separate plans, which meant a price increase for members who had used both.

In the same quarter it announced that the DVD-by-mail service would be renamed Qwikster, and then retracted the plan. ABC News reported that the plan announced in September was dropped in October, leaving DVDs and streaming on one website with one account.

The cost showed up in the numbers. According to the 10-Q, US subscribers fell by 805,000, from 24,594,000 at the end of June 2011 to 23,789,000 at the end of September, and US monthly churn rose from 4.2% in the second quarter to 6.3%.

2013: A Whole Season at Once

The January 2013 shareholder letter said that on 1 February Netflix would release all 13 episodes of House of Cards in all of its markets—an entire season available from day one, instead of one episode a week. The same letter put streaming membership at the end of 2012 at more than 27 million in the US, more than 6 million internationally and more than 33 million worldwide.

Japan: 2 September 2015

Netflix launched in Japan on 2 September 2015. SoftBank's announcement of 24 August said it would be the only company in Japan able to handle Netflix sign-up and billing together, and listed three plans at ¥650 (SD, one screen), ¥950 (HD, two screens) and ¥1,450 (4K, four screens) a month before tax. The two companies also said they would consider co-producing original content.

2023: The Last DVD, and Paid Sharing

The April 2023 shareholder letter said Netflix would wind down DVD.com that year and ship its final DVDs on 29 September 2023, ending the mail rental service begun in 1999.

The same year Netflix began charging for account sharing outside the household. Its July letter said paid sharing launched on 23 May in more than 100 countries representing over 80% of its revenue. CNBC reported that day that US members were being notified, with an extra member outside the household costing $7.99 a month.

When Netflix Stopped Counting in Public

For years Netflix led every quarter with its paid membership number. The April 2024 letter announced that from its first-quarter 2025 earnings it would stop reporting quarterly membership numbers and average revenue per membership (ARM).

The labels in the table follow what each document was counting at the time: subscribers, members, then paid memberships. The January 2026 letter reported 2025 revenue of $45.2 billion, an operating margin of 29.5% and advertising revenue of more than $1.5 billion.

2025–2026: The Warner Bros. Bid

On 5 December 2025 Netflix announced a definitive agreement with Warner Bros. Discovery (WBD) to acquire Warner Bros., including its film and television studios, HBO Max and HBO, at a total enterprise value of about $82.7 billion (equity value $72.0 billion).

The deal did not happen. Netflix's 8-K of 27 February 2026 says WBD had judged a revised proposal from Paramount Skydance to be a superior proposal and terminated the merger agreement that day. The $2.8 billion termination fee owed to Netflix was paid by Paramount Skydance on WBD's behalf.

Some twenty years after its first streams, the DVD-by-mail company had tried to buy one of Hollywood's major studios. For Netflix's public contest to improve its recommendation algorithm see the Netflix Prize; for the video-sharing site of the same era see YouTube.