The company produces, on average, 33 million dollars a day and accumulates one billion hours a month in views
At this moment, about 30% of the amount of people surfing the Internet are watching Netflix. According to the latest Statista metrics, the streaming company has 125 million users globally. If you compare these numbers with a country, it would be almost equal to the total of Mexico's population (127.5 million inhabitants).
Leer en español: Conozca cómo Netflix alcanzó a tener 125 millones de usuarios
In its early days, when Netflix was a company that rented DVDs via e-mail, it had a catalog of 900 titles, currently it holds about 7,000.
The recipe for success
The success of Netflix lies in two fundamental aspects. The first is the autonomy that gives the user to observe content when, where, and during the time they want without interruption of advertisement. The second is its algorithm capable of learning from the behavior of subscribers and discard content, it plans new productions and puts in front of the screen just what we wanted to observe without having even "looked" for it.
This highly developed algorithm solidified in 2014, when Netflix added 76,897 micro-genres or tags that would allow it to accurately identify better what and how the user wanted to see content. In other words, the streaming giant, in addition to observing the type of content consumed by each country, genre, age and time, studies the exact moment when a user pauses, advances or returns a fragment of the movie or series that they are watching, among thousands of other features.
How does Netflix make money?
Netflix is present in 190 countries and has 125 million users, who pay a monthly subscription of 8, 11, and 14 dollars, depending on the plan purchased. Assuming that all users pay the lowest rate (8 dollars), Netflix acquires a total of one billion dollars, monthly, only in subscriptions, a figure that equals 33 Million dollars a day, without selling a single millimeter of advertising space.
In the same way that money comes in, much of it comes back out. Netflix invested 100 million dollars in the production of the two seasons of the popular House of Cards series. The 13 episodes of the second season were 'devoured' by 634,000 people in just six days.
Among its most recent and expensive hits there is Stranger Things , each episode of the second season of this show cost 8 million dollars. The Crown exceeded in cost ST2, Netflix invested 10 million dollars for each chapter in the second season.
To these costs must be added the licenses paid by Netflix for hosting shows produced by other companies, such as La Casa de Papel "Money Heist". The price paid for these series or films varies according to the speed and time the user consumes each season, and although the exact figures are not known with certainty, they are calculated in billions of dollars per year.
700 new original series for 2018
According to the data collected by Flixable (Netflix's content search engine), since 2010 the company has removed near 2,000 films from its list, but has concentrated its efforts on increasing the production of original shows. This is confirmed with information recently granted by the company, which indicates that in the current year, Netflix plans to invest between 7 and 8 billion dollars for the production of 700 original shows.
Netflix's ability to take on challenges such as the aforementioned production plan leaves dozens of television networks unable to compete with this model, which allows Netflix to reach a range of one billion hours of views per month, quite a number envied for the media that live on advertising.
According to an article published in 2017 by the LA Times , Netflix has a debt of 20.54 billion dollars. Although it sounds astronomical, Netflix and its investors are not worried, since they indicate that this debt is part of their growth strategy and every three months acquire an average of 5 million new subscribers, a good pace to say that their colonization of televisions and electronic devices of the world, just start.
Latin American Post | Krishna Jaramillo
Translated from "Conozca cómo Netflix alcanzó a tener 125 millones de usuarios"