Netflix went public with several hundred thousand subscribers and a stack of red envelopes. Most Americans in 2002 rented movies from a video store and paid late fees when they forgot to return them. Netflix charged a monthly subscription instead. Customers built a queue on the website, and DVDs arrived in the mail. Reed Hastings and Marc Randolph founded the company in 1997. When it went public in May 2002, many investors doubted it could survive against Blockbuster.

A Disc Built for Mail

Netflix bet on two things. The first was that the cheap, light DVD could travel by mail. The second was that a subscription with no late fees would keep customers loyal. Its recommendation engine pointed people to older films they had never heard of, which made the large catalog valuable. From the start, the founders talked about one day delivering movies over the internet.

From Mailbox to Stream

Netflix priced its IPO at $15 a share in May 2002 and listed on Nasdaq. It began streaming in 2007 and started producing original series in 2013. It expanded to nearly every country in the world. Blockbuster, the rival investors once feared, went bankrupt in 2010. Netflix is still public and trades as NFLX, and it is one of the most valuable media companies on earth.

Cover: On the Stage, Hilaire Germain Edgar Degas. Art Institute of Chicago, public domain. Chosen for a theatre stage.