The Thing About Netflix
2010 was a magical year for me. I had already decided I wasn’t going back to college for a while, choosing to work instead and get some life under my feet. That year also came with a big step forward as a young man: moving into my first apartment with my girlfriend. That girlfriend is now my Wife, and since 2010 we’ve had a lot of changes including the marriage itself, having a little one, moving around a bit and then eventually buying a house. But there has always been one constant in our relationship: Netflix.
When we moved into our first place it was a no brainer. We were trying to live in a minimalist kind of way, keeping costs down and settling into an apartment smaller than I care to remember. We were already going to be paying for internet (we’re not savages), so Netflix was a clear choice over paying out the asshole for cable.
But one has to wonder: with all the glorious content they’ve been creating and the consistent lineup of past movies and television shows all crammed into one space, what is next? Or more importantly: what is happening now?
Over the past 8 years the rate we pay has gone up incrementally, but it’s still less than $20 per month, and if you live on the internet at all you’ve been hearing about the millions and millions they’ve been spending on creating their original content, let alone the cost of licensing for non-original content. What’s the secret? Are they running some type of credit card scam to play their bills, or is the volume of viewership really that good?
What if I told you that out of the $8.83 Billion in 2016 revenue, they only made out with $186 million in profit?
THAT is why I should have stayed in college and switched to the financial industry. But more on my life choices another time.
In truth, Netflix is the epitome of taking huge business risks and shooting for the stars when it comes to content. Thanks to George Lucas, companies Netflix and Amazon are now 1000 times smarter when it comes to profiting off their content when it comes to the basic marketing structures as well as incoming revenue from licensed material and merchandise. It’s at the point now where one could even question, considering the success of programming such as The Crown and Stranger Things, if in the future of Netflix’s profit they benefit equally from subscriptions and merch.
All I know for sure is they are investing most of their Billions (with a B) back into their projects, and if the success continues, Netflix will become a completely different beast by the time our daughter gets her own place.