We’re all thinking it… How does Netflix continuously turn a profit!? Even though they have tens of millions of subscribers it seems odd that they can stay profitable with all the original series and movies they have been making. After some research, we have realized the secret, and it actually makes perfect sense!
A basic Netflix subscription is very reasonably priced which may seem odd considering their being valued in the billions. However, they offer various upgrades that feed into their profits. Their second secret to success is actually their original series and movies, believed or not. When these original series gain popularity those committed to other streaming companies may switch because they want access to these exclusive showings. So they do spend a considerable amount on original projects, but it really pays out in the end. And lastly, it’s just the technology of the times. Everyone wants instant gratification and to keep up with their shows and favorite movie trends. And since Netflix really does appeal to all demographics (ages, races, genres, etc.) they have a huge customer base to pull from. Even though not confirmed I’m pretty sure they sell this information to other companies, similar to Facebook.
That is the bottom line when it comes to Netflix’s business model. So next time your watching Scandal in the car, Stand Up Comedy specials in a waiting room, or Love Actually with your significant other just know your money is being put to good use(;
