Netflix's business model

March 13, 2023
< 1 minute

By Sorin Anagnoste

Strategy | Business Models | Tech

Netflix's business model

Source: Netflix

With the year-end reporting season, I took a look at Netflix’s financials. (btw, they are the only large streaming movie platform that’s profitable)

So, I have reached the following conclusions:
1/ They are trying to be like a music label…by building their own catalog (+$100 bn spent in the last 10 years)
2/ Films hold a much lesser value than music. According to the accountancy standards each video loses 90% of its value in 4 years (most of the shows are not Seinfeld, ofc)
3/ International subscribers growth: 41% 10 yr CAGR
4/ Aggressive pricing policies resulted in a lower ARPU in 2022 vs 2021 for international markets
5/ Content budget for originals out of the total content budget: 46% in 2020, 55% in 2021, and 61% in 2022

More about this in my newsletter: https://lnkd.in/d3j4gVUi


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