Netflix was established by Reed Hastings and Marc Randolph in 1997, emerging from the founders' desire to innovate the traditional video rental industry. The service primarily targeted home movie enthusiasts who were frustrated with conventional rental shops. With the internet gaining popular traction, Netflix sought to leverage online technology to create a convenient rental experience. Customers could browse a unique catalog of films, which included a wide variety of genres and titles, from major blockbusters to independent films. Upon selecting titles, customers would receive DVDs in the mail, promoting an easy and enjoyable process to enjoy movies at home.

The launch of Netflix marked a significant technological advancement in the entertainment industry. It circumvented the late fees that plagued brick-and-mortar rental stores and introduced a monthly subscription model that allowed users unlimited rentals. This aspect of Netflix's model was particularly appealing to consumers, and its approach paved the way for future internet-based services in various industries. The simple yet effective user interface provided a seamless experience, encouraging more people to explore the joys of movie-watching.

As Netflix began to establish its market presence, it also faced challenges, including competition from established rental networks like Blockbuster. Nevertheless, through its innovative business strategies and commitment to customer service, Netflix carved out a niche in the entertainment landscape that would eventually lead to its explosive growth and evolution into a dominant streaming service.