ENTREPRENEURSHIP

How Does Netflix Make Money?

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If you’re very fond of watching movies, TV shows or documentaries, then you must have heard the name of Netflix. What exactly is Netflix? It’s a company that lets you stream shows and movies online. It initiated its business by renting out DVDs (still does) and now, it’s one of the most subscribed internet television networks. The question is, how does Netflix make money? There are a few things you need to know before finding that out. Let’s take a look.

Many people ask how Netflix can make such a vast sum of money. Well, all they do create an attraction, and they do not stop with their promotion. This leads to more and more people heading towards Netflix for watching the shows and movies. Also, due to the social media, Netflix has become a social trend as well. At most of the places on Facebook, you would see Netflix’s name.

What is happening? Well, Netflix is advertising itself in collaboration with other products. Isn’t that better than just regular advertising? It is.

How Does Netflix Make Money?

Netflix Business Model

When I say that Netflix is the world’s leading internet television network, I mean that 100 million members, around 190 countries, are spending 125 millions of hours watching movies and TV shows. It is expected that millions of people are a daily customer of Netflix, which brings them huge profits in return. Being a global business, it has its earnings from around the globe which makes the Netflix business model, a risk-free one.

Netflix’s target

They mainly target male and female genders between the ages of 17 to 60 years who also has households with income levels of $30,000 and up. Mostly, people who are too busy to go out and shop for movies, are frequent renters and movie buffs, or who want to get the most value for their money, are targeted by Netflix.

Netflix’s strategy

Another reason why Netflix is preferred is that it gives legal access to huge movies and TV shows. The service will be provided to you without any interruption of advertisements. You can watch it on any device that can be done red to the internet, be it a gaming console, your PC, TV, and even your mobile phones. Netflix releases the latest series as full seasons.

 

Monthly Membership Plan

One of how Netflix is making money is through its subscriptions or monthly membership fee. There are around 75 million people around the world, including login thieves, who have subscribed to Netflix. There are three subscription plans for the users that Netflix provides. The only difference in each project is the streaming quality of the show or the movie. The cost of each varies from country to country.

  1. Basic- provides Standard definition
  2. Standard- offers High definition
  3. Premium- provides an Ultra high definition

 

Netflix also has a monthly membership plan for the DVD renting service. The fee depends on the number of Disc out-at-a time and Discs per month. You can sit at home and get the DVDs delivered to your home.

Multiple subscription plans allow Netflix to target a large number of people. This way, people with different income levels do not find it out of their range. Netflix is one of the best business model examples.

Licensing

This is mainly how Netflix makes money. It buys the shows and movies from media houses, streams the content and gets the subscribers to pay the monthly fee. The company then spends the money it receives from subscriptions on more shows and movies. It then produces its season or a video and streams that for the subscribers. Then, Netflix gives out the licensing deals to other media channels. The quality and the storyline of their shows get more viewers to subscribe.

Conclusion

Well! Now we all know how Netflix makes money. The Netflix business model seems to be one of the most successful models as we all see. The company makes good figures regularly, and we all can witness that. Stay tuned to keep you updated with Netflix.



Anum is characterized by her uniqueness and talent as everything she writes has her own mark. She started exploring her writing in 2012 and now after hundred of thousands of words written she has become a professional writer. If you want to know more about her, follow her Facebook.