Reed Hast was said to have rented Apollo 13 from his local Blockbuster Video store and lost it. It was a $40 fine. Hastings told Fortune Magazine eight years ago: "I remember the fee because I was embarrassed about it. That was back in the VHS days, and it got me thinking that there's a big market out there. So I started to investigate the idea of how to create a movie-rental business by mail. I didn't know about DVDs, and then a friend of mine told me they were coming. I ran out to Tower Records in Santa Cruz, California, and mailed CDs to myself, just a disc in an envelope. It was a long 24 hours until the mail arrived back at my house, and I ripped them open and they were all in great shape. That was the big excitement point."
However different retellings of how Netflix came to be is the idea comes from a drive to the gym while contemplating the fine, in which Hastings realizes the gym-model of charging a flat fee to use a service as much as you wanted could revolutionize movie rentals. Hastings has also credited a graduate-school math problem with helping him see how the internet could be the future of video delivery while he was building the company around DVDs.
The fact is that on August 29, 1997, the company was incorporated in the US state of Delaware. The US-based video business was called Kibble, before the name was changed to NetFlix.com, and later Netflix. It began renting DVD rentals by mail in April 1998, and introduced its subscription model the following year. Nearly a decade later, Netflix started streaming video and changed the way we watch everything.
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