From renting DVDs to purchasing Warner: 7 important moments in Netflix’s history

A Netflix announced this Friday, December 5, a US$82.7 billion agreement to buy the Warner Bros. Discovery. It is the latest chapter in a journey that began 28 years ago with DVDs in the mail and reached the top of the entertainment industry.

Today, Netflix announced our acquisition of Warner Bros. Together, we’ll define the next century of storytelling, creating an extraordinary entertainment offering for audiences everywhere. https://t.co/rXPFMNIs1A pic.twitter.com/0pdsMUEob8

— Netflix (@netflix) December 5, 2025

To understand how the company from Scotts Valley, California, grew into a giant capable of swallowing one of Hollywood’s biggest studios, we have gathered six decisive milestones in this story.

Netflix: 7 defining moments

1997-1998: The beginning

Reed Hastings and Marc Randolph founded Netflix in August 1997, during conversations on their daily commutes between Santa Cruz and Silicon Valley. They tested several e-commerce concepts before investing in DVDs — a format that was exploding on the market and allowed mailing. The timing was essential: with VHS tapes, the business would be unviable due to the weight and cost of shipping, but DVDs were light, compact and resistant enough for the mail.

The company began operating in April 1998 with a catalog of 925 titles, almost everything that was available on DVD at the time. The initial model charged $4 per film plus shipping fees, but it soon evolved into an unlimited monthly subscription with no late fees. Even after the migration to streaming, Netflix maintained the DVDs-by-mail service for 25 years, only ending it in September 2023.

2000: Blockbuster refuses to buy Netflix for $50 million

In 2000, Hastings and Randolph walked into the 27th-floor boardroom of the Renaissance Tower in Dallas to meet Blockbuster executives. It took six months of trying just to get CEO John Antioco’s attention. The proposal was straightforward: Blockbuster would buy Netflix for $50 million and use the technology to expand its online business. Blockbuster executives literally laughed at the offer.

“When I lay down that night and closed my eyes, I visualized all 60,000 Blockbuster employees bursting into laughter.”Hastings recalled years later. At the time, the rental giant had more than 9,000 stores around the world and made billions — far beyond Netflix’s modest 300,000 subscribers. Blockbuster tried to respond in 2004 with its own mail service, but it was too late: It lost $984 million that year, went into bankruptcy protection in 2010, and ceased operations in 2014.

2002: IPO and exponential growth

Netflix went public on the Nasdaq in May 2002 at $15 per share (or $1.21 adjusted for later stock splits). The IPO took place two years after the humiliation in Dallas and represented a strategic turning point: instead of being bought, Netflix raised funds in the market to grow on its own.

At that time, the business was 100% DVD rentals by subscription, streaming was still technically unfeasible due to the limited speed of broadband internet. The IPO injected capital to expand the catalog and logistics: the company reached 1 million subscribers in 2003, jumped to 5.6 million in 2006 and reached 14 million in 2010.

The aggressive growth strategy worked: While Blockbuster relied on thousands of physical stores and employees, Netflix scaled its mail-order model with much lower costs per customer.

2007: Nasce o streaming

Netflix streaming debuted on January 16, 2007 as “Watch Now”, an experimental feature accessible only through browsers such as Internet Explorer.

Initially, it offered only 1,000 titles — 1% of the catalog of 70,000 DVDs —, requiring a minimum connection of 1 Mbps (3 Mbps for DVD quality), something rare at the time when broadband was still in its infancy in the USA.

The expansion was gradual, reaching all subscribers only in June, while the company sent 1.6 million DVDs per day and reached 1 billion discs sent in February (one copy of Babel for a customer in Texas). Reed Hastings invested US$40 million in infrastructure, cannibalizing DVD revenues to license digital content at 10x the cost, betting on a future that no one asked for yet. The risk paid off: revenue jumped 21% to US$997 million, with 7.48 million subscribers and profits growing 36%.

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2011: International expansion begins in Brazil

Netflix began its global expansion in 2010 with Canada, but in September 2011 it reached Brazil and 42 other Latin American countries simultaneously. Reed Hastings came personally to announce the service in Brazil, which cost R$14.99 per month. The initial catalog was limited, but the proposal of unlimited access for a fixed price quickly conquered the Brazilian market.

A curious fact from that time is that, despite the PlayStation 2 not having support for downloading applications, Netflix was available on the platform in Brazil. Between 2009 and 2012, Brazilians were able to access Netflix on the PS2 through a special DVD, which connected the console to the internet to stream films and series. This functionality was exclusive to Brazil — other regions did not have this experience. The presence on a variety of devices, which today includes smartphones and smart TVs, was already beginning to take shape here with innovative initiatives like this.

87% of Brazilians open Netflix waiting for the algorithm to decide for them what to watch

2013: House of Cards ushers in the era of original content

In February 2013, Netflix released the 13 episodes of the first season of House of Cards simultaneously, inaugurating a revolutionary “binge watching” consumption model — the possibility of watching an entire season at once. Produced with an estimated budget of US$100 million, the series was Netflix’s first big bet as a producer, moving away from the simple distribution of licensed content. This strategic move drastically reduced dependence on traditional studios and allowed Netflix to fully control the rights to productions, generating exclusive value for its subscribers.

In addition to driving the platform’s global growth, House of Cards it served as a laboratory to test new narrative, distribution and digital marketing formats, forever changing the audiovisual industry. Netflix’s boldness with consecutively acclaimed originals paved the way for a vast and diverse catalog, strengthening its competitive position and setting a standard for streaming in the following years.

2025: Netflix compra a Warner Bros. Discovery

This Friday, December 5, 2025, and Netflix announced the acquisition of the studios and streaming division of Warner Bros. Discovery for $82.7 billion, including debt, in one of the biggest deals in entertainment history. The offer of $27.75 per share ($23.25 in cash and $4.50 in Netflix stock) beat out rivals like Paramount and Comcast after three rounds of bidding, cementing Netflix’s position as the biggest global force in the industry.

The acquisition includes not only the Warner Bros. film and TV studios, but also the streaming platforms HBO Max and HBO, adding a vast catalog of original content, iconic franchises and intellectual properties that strengthen Netflix’s offering. This movement brings essential strategic gains: a dramatic increase in Netflix’s bargaining power vis-à-vis device manufacturers and content providers, potential expansion of the subscriber base thanks to combined packages and greater control over the audiovisual production and distribution chain.

Furthermore, by incorporating Warner’s catalog and its new productions, Netflix will be able to significantly expand its production of original content, offering a diversity and volume capable of competing with any other service, even in the face of the accelerated growth of global competitors such as Disney+, Amazon Prime and Apple TV+. The purchase makes clear Netflix’s commitment to becoming not only a streaming platform, but a complete audiovisual studio, capable of dictating consumer trends and shaping the market.

The deal is expected to be completed in the third quarter of 2026, subject to regulatory approval in the United States and Europe, which may impose conditions to avoid excessive concentration. However, the closing of this deal could redefine the landscape of the entertainment industry for years to come.