Their main objectives at this time were to rent and sell DVDs over the Internet. Marc helped to start a computer mail order company called MicroWarehouse, vice-president of marketing for Borland International. Apart from his background, Hastings founded Pure Software, and sold it for a massive $700 million. With finances backed up, he supplied the startup cash of $2.5 million in order to get the project rolling. During the initial planning stages of Netflix, only a few video stores carried DVDs. This was one of the huge keys to its success. DVDs were still fairly a new concept for many individuals and store owners. Because of their lightweight and compact size, Netflix capitalized on this and strategized on how to ship DVDs by mail at a fraction of the cost it would take to ship bulky videotapes. Netflix “experimented with more than 200 mailing packages before finding one that could safely ship a disc (in a plain case without cover art and inserts) for the cost of a single first-class stamp which is cheap >50 cents When the company finally reaching an agreement on shipping methods, costs, and operating structures, Netflix finally opened for business on April 14, 1998, with 30 employees and only 925 titles for rent. Rental fees began as $4 for a seven-day DVD rental, plus a $2 shipping fee.
Quickly realizing that this was not enough to garner interest and fully expose their innovative masterpiece, Netflix sought help. The company also promoted its services in as many channels as possible, by strategically partnering with companies such as Toshiba America, Pioneer, Hewlett-Packard, Apple, and Sony. Promotional tactics included providing three free DVD rentals with the purchase of a DVD player. A year after its success and opening, responding to fierce competition closing in on its heels, Netflix moved onto its famous subscription plan. Staring at $15.95 a month, customers were given the option to pre-select four DVDs and rent them out without...
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