Finances
2013 2014 2015
Total Revenue (in thousands)
4,374,562 5,504,656 6,779,511
Cost of Revenue (in thousands)
3,117,203 3,752,760 4,591,476
Gross Profit (in thousands)
1,257,359 1,751,896 2,188,035
Business Model● Subscription model
● Flat monthly cost
● Make deals with content owners, deliver to you
As a startup● Founded in 1997 by Reed Hastings and Marc Randolph
● Inspired by late fees, started at 50¢ per US rental
● Later moved to monthly subscription
Establishing the Brand● 2000: Blockbuster passes on offer for $50 Million
● IPO’d in 2002 at $15.00 (up 11,471%)
● Started to move to VOD in 2007
Secret Sauce and What’s Hot● Variety to cater to all audiences
● Netflix Originals
● Deals with Major Studios
Netflix Originals● Different process from TV networks
● Produced hits: House of Cards, OITNB, Stranger Things
● Won 149 awards w/ 744 nominations
Role of Netflix● Started as DVD rental service in entertainment industry
● Middleman between content and you
● Now becoming content creator
CompetitorsCompany Cost Number of
Subscribers2016 Emmy Nominations for Original Content
$7.99/mo 93 million 54
$7.99/mo 12 million+ 2
$8.25/mo ($99/yr)
54 million+ 16
$14.99/mo 1 million 94
References● https://en.wikipedia.org/wiki/Netflix
● https://rctom.hbs.org/wp-content/uploads/sites/4/2015/12/netflix-revenue1.png
● https://mic.com/articles/134272/how-does-netflix-pay-studios-what-the-streaming-
giant-does-to-obtain-content#.j0V3KAQox
● http://www.investopedia.com/articles/investing/062515/how-netflix-pays-movie-an
d-tv-show-licensing.asp
● http://money.cnn.com/2016/05/04/media/hulu-subscribers-cable-bundle/
● http://www.investors.com/news/amazon-com-has-more-u-s-streaming-subscribers-
than-netflix/
● http://finance.yahoo.com/quote/NFLX/financials?p=NFLX