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It specializes in and provides streaming media and video-on-demand online and DVD by mail.

But after discovering You Tube, and witnessed how popular streaming services were despite the lack of high-definition content, the concept of using a hardware device was scrapped and replaced with a streaming concept instead. Netflix developed and maintains an extensive personalized video-recommendation system based on ratings and reviews by its customers.

On October 1, 2006, Netflix offered a $1,000,000 prize to the first developer of a video-recommendation algorithm that could beat its existing algorithm Cinematch, at predicting customer ratings by more than 10%.

When they heard about DVDs, which were available in only a few markets in 1997, they tested the concept of selling or renting DVDs by mail, by mailing a compact disc to Hastings' house in Santa Cruz.

When the disc arrived intact, they decided to take on the $16 billion home video sales and rental industry.

In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.

For some time the company had considered offering movies online, but it was only in the mid-2000s that data speeds and bandwidth costs had improved sufficient to allow customers to download movies from the net.

In 2007, Netflix expanded its business with the introduction of streaming media, while retaining the DVD and Blu-ray Disc rental service.

The company expanded internationally, with streaming made available to Canada in 2010 Netflix entered the content-production industry in 2013, debuting its first series, House of Cards.

Hastings is often quoted saying that he decided to start Netflix after being fined $40 at a Blockbuster store for being late to return a copy of Apollo 13 but this is an apocryphal story that he and Randolph designed to explain the company's business model and motivation.

and then dropped the single-rental model in early 2000.

The original idea was a "Netflix box" that could download movies overnight, and be ready to watch the next day.