A brief history of Netflix

Updated 6:06 PM ET, Mon July 21, 2014

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Reed Hastings, pictured, and Marc Rudolph, two software engineers, founded Netflix in 1997 to use the Internet to rent movies on DVD, then a new format. (An <a href="http://www.fool.com/investing/general/2012/11/12/9-fascinating-things-about-reed-hastings-and-netfl.aspx" target="_blank">old, discredited story</a> claims that Hastings had the idea after Blockbuster charged him a $40 late fee for "Apollo 13.") Rudolph left in 2002.

Photos: A brief history of Netflix

A brief history of Netflix – Reed Hastings, pictured, and Marc Rudolph, two software engineers, founded Netflix in 1997 to use the Internet to rent movies on DVD, then a new format. (An old, discredited story claims that Hastings had the idea after Blockbuster charged him a $40 late fee for "Apollo 13.") Rudolph left in 2002.

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Photos: A brief history of Netflix

A brief history of Netflix – In 1999, Netflix adopts a monthly subscription model: unlimited rentals for a single monthly rate.

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In 2006, the company announced the $1 million "Netflix Prize," encouraging people to come up with a better algorithm than its current recommendation system, which was gummed up by divisive movies such as "Napoleon Dynamite." Three years later, the prize is claimed by a seven-man team, though Netflix never used their idea.

Photos: A brief history of Netflix

A brief history of Netflix – In 2006, the company announced the $1 million "Netflix Prize," encouraging people to come up with a better algorithm than its current recommendation system, which was gummed up by divisive movies such as "Napoleon Dynamite." Three years later, the prize is claimed by a seven-man team, though Netflix never used their idea.

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