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Netflix has almost 100 Million users. That means they are spending approximately $70 per user on new Content in 2018. Netflix costs between $7-$12 per month.
by ghostbrainalpha 9y ago
Netflix has almost 100 Million users. That means they are spending approximately $70 per user on new Content in 2018.
Netflix costs between $7-$12 per month. Many of those subscribers will not last the whole year. It is awesome they are spending basically 100% of their revenue on new content, but this model is not sustainable.
- msmith 9y agoMost of the content has a shelf life much longer than one year, so I'm sure that factors into the equation.
- sanmon3186 9y agoPlus good content invites new customers. Netflix has expanded to pretty much entire world now (China is the only major market with no Netflix). From my experience in India, they are investing heavily on local content. Existing, original or licensed, content is not enough for these markets.
- tybit 9y agoThey made $8.8 billion in 2016, I think it's fair to say they expect to make far more than that in 2018. While their US rates may be $7-$12 per subscriber, their international revenue projections may be quite different. For example at current exchange rates I'm paying just under $15 USD for my account in Australia(though I'm sure not every country is so expensive).
- probe 9y agoI'm confused, based on the numbers you provided, doesn't their model make a lot of sense? If on average you're getting ~$10/user/month, that's $120/user/year of which you're just spending $70/user/year, and thus have gross profits of ~$50/user/year. In other words, you're getting $12B in revenue, $7B of which you're spending on content to ensure that churn stays low and people continue to re-subscribe.