binge-watching

Money Heyst, Binge-Watching, And Netflix Business Model

Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

New content models

Speaking at the Edinburgh Television Festival, he urged the industry to nurture talent and give audiences: “what they want, when they want it.”

And Kevin Spacey continued: “If they want to binge then we should let them binge.”

He stressed how the media industry could learn from the unlearned lesson from the music industry: “Give people what they want, when they want it, in the form they want it in, at a reasonable price, and they’ll more likely pay for it rather than steal it.”

The lean methodology of screenwriting

Álex finally founded his production house, Vancouver Media.

He finally felt free to produce content without too much pressure and express what he had been thinking about for almost a decade!

After almost two decades as a screenwriter, in 2016, he had launched a successful series in Spain, Vis a vis. 

In the same year, Álex left the production house he worked for (Globomedia) and started his own business.

Since 2008, he had this project in mind, which was more the fruit of the passion that Álex, together with his colleagues, had.

They wanted to develop a series and script without too much interference from the production house.

He attempted something never done before on the Spanish television, that of developing a heist story, which would turn in a successful series launched on a Spanish National TV.

That series was called Casa De Papel. 

While the storyline of Casa De Papel was written down since the start, its finest details would be developed throughout the launch of the series.  

Enabling producers to understand the reaction of the audience as more episodes would get consumed. 

Also Kevin Spacey highlighted during his 2013 speech, how the launch and release of many episodes at once would provide strong feedback to content-makers around how people reacted to their behavior.

This new model would become the rule as media platform businesses would take off.

A matter of business modeling

In 2018, Netflix bought the rights to distribute Casa De Papel on its global platform, to see it become the most-watched non-English series.

Netflix changed the name of the series to Money Heist, and the rest is history!

Powered by a global platform, driven by a subscription service, Netflix could push out the whole series without advertising in between, by releasing the whole series at once (instead of pacing that on a weekly basis), which made people develop the so-called binge-watching habit (or addiction). 

So if you think that binge-watching and content formats are all a matter of artistic choices, you’re missing the point.

That is about business modeling, and you better understand how Netflix Business Model works if you want to understand why and how Netflix formats, launches, and distributes its content the way it does.

When bypassing the old media business model becomes the rule

The traditional model worked by launching a premier on a more traditional media (TV or Cinema) then releasing it gradually.

As the episodes are released new seasons might be produced with or without audience feedback.

The new model instead has learned to widely gather audience behavior and feedback as part of the overall production process.

The new model isn’t intrinsically better than the old model. However, from this new model, the fabric of modern culture is coming out. So old models better understand that.

And we can see in action how a revenue model of a platform (Netflix is based on subscription revenues) pushed the same platform toward new content formats (series vs. single movies, and shorter episodes vs. TV series episodes).

Read next: Netflix Business Model, Netflix Profitability

More on Netflix Business Model

Netflix Business Model

netflix-business-model
Netflix is a subscription-based business model making money with three simple plans: basic, standard, and premium, giving access to stream series, movies, and shows. Leveraging on a streaming platform, Netflix generated over $29.6 billion in 2021, with an operating income of over $6 billion and a net income of over $5 billion. Starting in 2013, Netflix started to develop its own content under the Netflix Originals brand, which today represents the most important strategic asset for the company that, in 2022, counted almost 223 million paying members worldwide.

Binge-Watching

binge-watching
Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

Coopetition

coopetition
Coopetition describes a recently modern phenomenon where organizations both compete and cooperate, which is also known as cooperative competition. A recent example is how the Netflix streaming platform has been among the major customers of Amazon AWS cloud infrastructure, while Amazon Prime has been among the competitors of the Netflix Prime content platform.

Platform Expansion Theory

netflix-market-expansion

Netflix SWOT Analysis

netflix-swot-analysis
Netflix is among the most popular streaming platforms, with a subscription-based business model. The brand, platform, and content are strengths. The volatility of content licensing and production are weaknesses. The streaming market is a potential blue ocean. The inability to attract and retain premium members and its fixed long-term costs threaten its business model.

Is Netflix Profitable

is-netflix-profitable
Netflix is a profitable company, which almost $4.5 billion in net profits in 2022, slowing down compared to over $5 billion in earnings for 2021.

Who Owns Netflix?

who-owns-netflix
Netflix’s largest individual shareholder is Reed Hastings, co-founder, and CEO of the company, with a 1.7% stake, valued at over $1.8 billion in 2022. Netflix runs a subscription-based business model that generated $29.6 billion in revenues, and it had over 221 million global members in 2021. Netflix’s business model runs only premium content on its platform, driven by its Netflix Originals shows. Netflix is also building an ad-supported version.

Netflix Employees

netflix-employees
By 2022, Netflix had 12,800 employees across the world, compared to 11,300 employees in 2021.

Netflix Subscribers

netflix-subscribers
In 2022, Netflix had 230 million paid subscribers, a growth compared to the almost 222 million paid subscribers in 2021.

Netflix Revenue

netflix-revenues
Netflix generated over $31.6 billion in revenue in 2022, compared to $29.7 billion in 2021. Netflix was profitable in 2022, as it generated almost $4.5 billion in profits.

Netflix Revenue Per Subscriber

netflix-revenue-per-subscriber
In 2022, Netflix generated over $141 per subscriber yearly, on average, compared to $140 in 2021.

Netflix Revenue Per Employee

netflix-revenue-per-employee
In 2022, Netflix generated over $2.4 million in revenue per employee, compared to $2.6 million in 2021.

Netflix Subscribers Per Country

netflix-subscribers-per-country
Netflix had over 74 million paying members in US & Canada, over 76 million in the EMEA region, almost 42 million in the LATAM region, and 38 million in the APAC region.

Netflix Revenue Per Subscriber In Each Geography

Netflix Average Monthly Revenue Per Subscriber
The most significant geography in terms of average monthly revenue per subscriber in 2022 was US & Canada, with $15.8, compared to $10.99 in the EMEA region and $8.50 in APAC and LATAM.

Disney vs. Netflix

disney-vs-netflix
In 2022, The Walt Disney Company’s total paid subscriber base was larger than Netlfix, with over 235 million paid members, compared with Netflix’s over 230 million members. However, Disney’s offering is fragmented among Disney+, ESPN+, and Hulu, compared with Netflix, which has a single offering.

Read Also: Netflix Business Model, Netflix Content Strategy, Netflix SWOT Analysis, Coopetition, Is Netflix Profitable.

About The Author

Scroll to Top
FourWeekMBA