What is Netflix?
Being the world’s leading entertainment service, with over 220 million paid memberships in over 190 countries, Netflix relishes various TV series, documentaries, feature films, and mobile games across multiple genres and languages.
Netflix currently has three subscription plans (basic, standard, and premium), starting from $8 to $14. However, it is not completely Netflix’s business model.
Netflix allows unlimited binge-watching for paid members. They can watch shows on any internet-connected screen anytime they want. Members can also play, pause, and resume watching without advertisement.
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