Netflix is one of the largest and most popular services for viewing movies, television, and documentaries.
From mail-order DVD rentals to streaming digital media on nearly any device, Netflix has revolutionized entertainment at home and on-the-go.
Who Started Netflix?
Netflix, the media service provider no serving 190 countries, began as a humble DVD rental-by-mail service. Reed Hastings and Marc Randolph founded Netflix in 1997 to sell DVDs online. Hastings quickly changed the business model to focus on rental services.
In 2007, Netflix expanded their services to include Blu-ray discs and streaming media. By 2017 Netflix had spread to nearly 200 countries and nearly replaced all of its physical media competitors in less than two decades.
What Is Netflix And How Do They Make Money?
Netflix is first and foremost a media content provider operating on a subscription business model. Users pay a monthly or yearly fee for access to physical and digital media.
TV shows, movies, documentaries, and more can be delivered as DVDs via mail or streamed digitally through nearly any internet-enabled device in standard, high-definition, or ultra high-definition quality.
What Are The Netflix Membership Options?
Netflix makes money through membership fee, typically for streaming services. Members can select from three different streaming plans:
- Basic ($7.99/month) – limited number of users, standard definition only
- Standard ($10.99/month) – more users, standard and high definition
- Premium ($13.99) – most users, maximum video quality
Who is Netflix’s target audience?
With the advent of affordable and widespread cellular data coverage, Netflix is capable of reaching a larger audience than ever before.
From 2016 to 2017 Netflix saw a 82% increase in their mobile viewers thanks to 4G LTE coverage. Here’s some more info about who’s watching:
- 89% of viewers are 18 to 39-years-old
- 50% of subscribers have young children under the age of 5-years-old
- The average household income of most subscribers is over $73,000/year
Is Netflix In Debt?
Netflix had more than 109 million global streaming subscribers in 2016, including more than 75% of homes in the United States. That year the company reached $8 billion in revenue.
The company was $20 billion in debt by August, 2017, but this frightening financial figure doesn’t mean trouble.
Unlike video store companies like Blockbuster, which were destroyed by digital streaming services, Netflix is willing to take big risk based on where the market is headed. Instead of investing solely in existing popular content, Netflix has reached out to create new content and acquire more obscure content with a smaller but loyal audience.
With $20 billion on the line, Netflix is betting that viewers would be willing to watch a $100 million film from the comfort of their home, even if that film was never shown on the silver screen.
Click here to learn more about how traditional TV networks make money.