Netflix, which started as a DVD rental store in 1997, has grown into the world's largest subscription-based content streaming platform, operating in over 190 countries, with 204 million subscribers and revenues of $25 billion by the end of 2020. The company's growth strategy to date can be divided into four phases:

Transition from Pay-per-Rental DVD to Monthly Subscription

In the first phase, the board established Netflix as the world's first DVD rental store, capitalizing on the lower inventory and shipping costs of DVDs compared to VHS tapes, and thus stepping into rapidly growing e-commerce. Later, the business model shifted from pay-per-rental to a fixed monthly subscription, creating a competitive advantage over Blockbuster through unlimited rentals, no deadlines, no late fees, and same-day delivery. Although the company had not yet reached profitability after its IPO in 2002, it had approximately 1 million monthly subscribers.

Revolutionizing the Industry with Unlimited Online Streaming

In the second phase, Netflix revolutionized the Media and Entertainment industry by offering subscribers instant unlimited content streaming on personal computers in 2007. By the end of 2019, DVD sales accounted for less than 2% of total revenue. Netflix also pursued geographic expansion beyond the U.S., initially focusing on markets with similar characteristics, entering Canada in 2010 due to geographic proximity, and economic and socio-demographic similarities.

Unique Selling Proposition with Netflix Originals

In the third phase, the company accelerated its global expansion, reaching 50 countries by 2015. Key factors driving expansion included a financially sustainable subscriber base, availability of high-speed internet, and widespread use of smart devices. Initially, expansion faced challenges, such as the lack of original content before 2012, which limited Netflix's differentiation from other services like cable TV. Furthermore, piracy was common in Asian markets, diminishing Netflix's appeal. To overcome these challenges, Netflix shifted its strategy to become a major content creator, launching Netflix Originals (over 1,500 titles by May 2021), emphasizing exclusive content production to distinguish itself globally.

Global Expansion by Meeting User Needs

In the fourth phase, Netflix pursued rapid global expansion through targeted content production and marketing strategies, reaching over 190 countries by 2020. Amid the cord-cutting revolution of the early 2010s, as consumers' viewing preferences shifted, Netflix capitalized on partnerships with traditional cable operators (such as T-Mobile and Comcast) to attract subscribers. Additionally, Netflix discovered through user data analytics that locally-produced original content could attract global audiences. Recognizing emerging markets' preference for mobile internet access, Netflix optimized its service for lower internet speeds and offered competitive subscription pricing. Consequently, subscribers in Asia-Pacific regions grew significantly, from 7 million in 2017 to 28 million by the first half of 2021.

In a streaming industry increasingly dominated by BigTech (Amazon, Google, Apple) and traditional Media and Entertainment companies, it will be interesting to observe whether Netflix can maintain its competitive advantage and continue capturing market share, supported by cord-cutters, in the evolving global telecommunications, media, and entertainment landscape.