How Do Netflix Movies Make Money – The Details

How Do Netflix Movies Make Money

Netflix is a very popular streaming service company that offers subscription-based streaming services to its users. So, it’s quite clear that Netflix makes most of its profit from subscription fees. Another source of incomee for Netflix is sponsorship money, investments, copyright sales, and many more. Moreover, Netflix also generates revenue from DVD rentals service in the USA but over the last few years’ revenues from this service have declined.

Company Overview: Netflix

Founded on August 29, 1997, by Reed Hastings, and Marc Randolph, Netflix Inc. is American based world’s number one streaming service provider. It offers subscription-based video streaming services in more than 190 countries around the world excluding China, Crimea, North Korea, and Syria. Netflix has a huge content category and it has its own productions named Netflix Originals. Netflix also offers various movies, serials, etc. through distribution deals. You will be amazed to know that Netflix has more than 221.6 million subscribers worldwide. The below table will give you an idea about the Netflix subscribers worldwide –

The United States and Canada74.6 million
Europe, the Middle East, and Africa74.0 million
Latin America39.9 million
Asia-Pacific32.7 million

Since its establishment, Netflix has been playing a very important role in independent film distribution. The best part of Netflix is it supports a huge number of platforms like a computer, smart TVs, set-top boxes, tablet computers, smartphones, digital media players, video game consoles, virtual reality headsets, and many more. In Q1 of 2022, Netflix has generated more than 7.87 billion U.S. dollars and it has surpassed the total revenue of 7.16 billion in the corresponding quarter of 2021.

Netflix Quarterly Revenue (2009 – 2022)

Netflix Quarterly RevenueMillions of US $
2022-03-31
2021-12-31
2021-09-30
2021-06-30
2021-03-31
2020-12-31
2020-09-30
2020-06-30
2020-03-31
2019-12-31
2019-09-30
2019-06-30
2019-03-31
2018-12-31
2018-09-30
2018-06-30
2018-03-31
2017-12-31
2017-09-30
2017-06-30
2017-03-31
2016-12-31
2016-09-30
2016-06-30
2016-03-31
2015-12-31
2015-09-30
2015-06-30
2015-03-31
2014-12-31
2014-09-30
2014-06-30
2014-03-31
2013-12-31
2013-09-30
2013-06-30
2013-03-31
2012-12-31
2012-09-30
2012-06-30
2012-03-31
2011-12-31
2011-09-30
2011-06-30
2011-03-31
2010-12-31
2010-09-30
2010-06-30
2010-03-31
2009-12-31
2009-09-30
2009-06-30
2009-03-31
$7,868
$7,709
$7,483
$7,342
$7,163
$6,644
$6,436
$6,148
$5,768
$5,467
$5,245
$4,923
$4,521
$4,187
$3,999
$3,907
$3,701
$3,286
$2,985
$2,785
$2,637
$2,478
$2,290
$2,105
$1,958
$1,823
$1,738
$1,645
$1,573
$1,485
$1,409
$1,340
$1,270
$1,175
$1,106
$1,069
$1,024
$945
$905
$889
$870
$876
$822
$789
$719
$596
$553
$520
$494
$445
$423
$409
$394

Company Profile of Netflix

Company nameNetflix, Inc.
Type of businessPublic
Type of siteOTT streaming platform
HeadquartersLos Gatos, California, U.S.
IndustryTechnology & Entertainment industry, mass media
ServicesFilm production, Film distribution, Television production, Television distribution, etc.
Employees12,135
Websitehttp://netflix.com/

List of Countries where Netflix is Available

Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antigua and Barbuda Argentina Armenia Aruba Australia Australian Antarctica Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin (Dahomey) Bermuda Bhutan Bolivia Bonaire, Sint Eustatius and Saba Bosnia and Herzegovina Botswana Brazil British Guyana British Indian Ocean Territory The British Virgin Islands Brunei Darussalam Bulgaria Burkina Faso (Upper Volta) Burundi Cambodia (Kampuchea) Cameroon Canada Cape Verde Islands (Cabo Verde) Cayman Islands The central African Republic Chad Chile Christmas Island Cocos (Keeling)Islands Colombia Comoros Cook Islands Costa Rica Croatia Cuba Curaçao Cyprus Czech Republic Democratic Republic of Congo Denmark Djibouti Republic Dominica Dominican Republic East Timor (Timor-Leste) Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fijian Islands Finland France French Guiana French Polynesia Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Haiti Heard Island and McDonald Islands Honduras Hong Kong Hungary Iceland IndiaNamibia Nauru Nepal Indonesia Iran Iraq Ireland Isle Of Man Israel Italy Ivory Coast Jamaica Japan Jersey Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Lao People’s Democratic Republic Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macao Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Mexico Micronesia Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar (Burma)      Netherlands Netherlands Antilles New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island Northern Mariana Islands Norway Oman Pakistan Palau Palestine Taiwan Tajikistan Tanzania Thailand Togo Tokelau Islands Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks And Caicos Islands Tuvalu U.S. Virgin Islands Uganda Ukraine United Arab Emirates United Kingdom (Great Britain) United States Uruguay Uzbekistan Vanuatu (New Hebrides) Vatican City (Holy See) Venezuela Vietnam Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe

Business Model of Netflix: How Netflix Makes Money

Netflix’s business model consists of subscription-based on-demand service and DVD rental service by mail. Though many of us know Netflix as a popular streaming service provider but it was not Netflix’s first source of income. Netflix is a more than 25 years old company and its first service was a DVD rental service by mail and at that time it was its first source of income. With the advancement in technology, Netflix followed the trend and introduced the streaming service. Now with times, Netflix’s main source of income is the subscription-based streaming service.

Business Model of Netflix: How Netflix Makes Money

1. Subscription Fees

Currently, the prime source of income for Netflix is its membership plans. If you want to use the Netflix streaming service then you have to buy a subscription plan from Netflix. Netflix has 4 types of membership plans and the fees range from $3.99 to $11.99. The below table will give you a clear idea about Netflix’s subscription plans and pricing –

  DescriptionPlans and Pricing
MobileBasicStandardPremium
Monthly cost$3.99$7.99$9.99$11.99
Number of screens you can watch on at the same time1124
Number of phones or tablets you can download on1124
Unlimited movies, TV shows, and mobile gamesYesYesYesYes
Watch on your mobile phone and tabletYesYesYesYes
Watch on your laptop and TV YesYesYes
HD available  YesYes
Ultra HD available   Yes

Netflix has generated more than $11 billion in revenue from the subscription fees in 2021. Below are the Netflix annual subscribers from 2011 to 2021 –

YearSubscribers (mm)
201121.50
201225.71
201335.63
201447.99
201562.71
201679.90
201799.04
2018124.35
2019151.56
2020192.95
2021209.03

Netflix Revenue from Subscription Plans

YearAmount (mm)
2017933.94
20181282.04
20191639.87
20202105.08
20212270.06

2. DVD Rentals

When Netflix started its journey, DVD rental was its main source of income. Since 1998, Netflix has sent more than 5 billion DVDs to customers in the USA. Still, now Netflix offers DVD rental service by mail to USA customers and makes money. However, with all the latest technologies, the sales and revenues from DVD rental services are declining every year. There are two types of monthly plans available for DVD rental service. They are –

  • Standard DVD plan: $7.99 per month
  • Premier DVD plan: $11.99 per month

The standard DVD plan allows the customer to order one disc at a time and an unlimited number of discs per month. On the other hand, the Premier DVD plan allows the customer to order two discs at a time and an unlimited number of discs per month.

Netflix DVD Rental Service Revenue by Quarter (2012 – 2021)

CategoryTotal Revenue ($)
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
319.70 million
291.49 million
271.32 million
254.37 million
243.29 million
232.38 million
221.87 million
213.26 million
204.35 million
194.72 million
186.60 million
179.49 million
173.20 million
164.02 million
157.52 million
151.00 million
144.75 million
138.73 million
132.38 million
126.41 million
120.39 million
114.74 million
110.21 million
105.15 million
98.75 million
92.90 million
88.78 million
85.16 million
80.69 million
76.20 million
71.88 million
68.45 million
64.33 million
61.57 million
58.83 million
54.65 million
49.58 million
46.29 million
44.23 million

According to the above tables, there is a 19% decline in the revenue of DVD rental services from 2019 to 2021.

FAQs about How Do Netflix Movies Make Money

How many employees work on Netflix?

According to the LinkedIn profile data, Netflix has more than 15,200 full-time employees.

What is the most-streamed TV show on Netflix?

The Office is the most streamed TV show on Netflix. The TV show has a total of 57.1 billion watch minutes!

What is Netflix’s business model?

Netflix has a subscription-based business model. Netflix has four types of subscription plans to choose from. You have to buy any of the available subscription plans to enjoy the streaming service from Netflix. When you subscribe to a Netflix membership plan, you will get access to a huge collection of movies, series, shows, etc.

What are the most-watched TV shows on Netflix?

Below is a list of the 10 most-watched TV shows on Netflix –

What are the most-watched TV shows on Netflix?
NameNumber of Hours Viewed
Bridgerton: Season 1625.5 million hours
Stranger Things 3582.1 million hours
The Witcher: Season 1541.0 million hours
13 Reasons Why: Season 2496.1 million hours
13 Reasons Why: Season 1475.6 million hours
Maid469.1 million hours
You: Season 3467.8 million hours
You: Season 2457.4 million hours
Stranger Things 2427.4 million hours
Sex Education: Season 3418.8 million hours

References:

https://netflixlife.com/2020/10/30/how-do-netflix-movies-make-money/
https://www.investopedia.com/insights/how-netflix-makes-money/

Last Updated on August 7, 2022 by Ana S. Sutterfield

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