Netflix approached the Hollywood studios to license their content for streaming, and Hollywood snickered and took the easy money. They expected it to be a total failure on Netflix's end.

Then, when Netflix started growing like crazy and the studios panicked. If Netflix was the only streaming service around, it would enable them to dictate licensing contracts. Suddenly, streaming was a real thing and they wanted to extract every cent possible from their content.

In order to slow Netflix down the studios pulled the majority of the "good" content from Netflix, and kept licensing them their b-movies and documentaries. To this day, you still don't see a whole lot of blockbusters or theatrical releases available on Netflix.

Netflix knew that they couldn't remain at the mercy of the content owners. So they leveraged their head start on content delivery by producing their OWN content only available through themselves.

It was a brilliant strategy, and I'm sure it took a lot of cajones to go down that path.