Netflix Business Model: A Quick Glance
Netflix’s Business Model is a blend of on-demand subscriptions with “eating till you get full” business models. Get it? Let us understand it further here.
How often have you heard this phrase, is that show on Netflix, from your friends and families when you tell them about a new show or movie?
If your answer is every time you are not alone, pal, because Netflix is now a global brand for online entertainment. Or perhaps it is a tremendous contributor to series growth in recent years.
Although you may be familiar with these things about Netflix, you may not know that Netflix is more than 20 years old, and when it was established back in 1998, it was merely a DVD rental service by mail.
Regardless, the company has not failed in time, like many others in the entertainment industry, and the current success of Netflix is because of its constant follow-ups to trends and standards.
Therefore, Netflix’s business model is a great learning experience for everyone. It shows how a company, earlier crawling towards disappointment, chased success in the long run.
How Does Netflix Make Money? (Netflix Business Model Analysis)
Barton Crockett, JP Morgan’s analyst, put out a statement in 2007, wherein he said Netflix, which pioneered online DVD rental and dominated the industry with over 6.8 million paid users, experienced competition from big players like Blockbuster that is much tougher than we had initially predicted.
He said that Netflix is going through a challenging competition by the back-then DVD rental – Blockbuster.
Because Netflix in 2007 was facing very peculiar crunch circumstances. Furthermore, after the news came out, the stock prices of Netflix went down by 5%.
Moreover, in general, the market became highly suspicious about Netflix’s future growth.
However, Netflix was so strategically competent to steer through this position that in the next 15 years, Netflix evolved as one of the best-performing stocks across the globe.
During the last few years, Netflix cultivated a return of 10,000% from 2017 to 2018.
In this aticle, let us decipher such an impactful analysis and the business model of the world’s largest OTT platform – Netflix. First, let us understand the business model of Netflix, followed by its strategies and money-magnet approach. Nevertheless, before we move further, let us take a bird’s eye view of how Netflix works.
Table of Content
- What is Netflix?
- Netflix Business Model: A Quick Glance
- How does the Netflix Business Model work?
- Partners of Netflix
- Cost structure
- Does Netflix make money?
- How does Netflix make money?
- Conclusion