Netflix generates over 99.5% of its revenue from streaming. While the remaining, about 0.5%, comes from DVD. Indeed, before becoming a streaming service, Netflix was a DVD service company; thus, a tiny chunk of revenue still comes from DVDs.
Key Facts | |
Founder | Marc Randolph & Reed Hastings |
Year & Place Founded | August 29, 1997, Scotts Valley, California |
Initial Business Model | Sold DVD by mail, with a subscription business model |
Year of IPO | 5/23/2002 |
IPO Price | $15.00 |
Total Revenues at IPO | $75.9 million in 2001, before the IPO |
Business Model Change | Fully transitioned to streaming in 2008 |
Total Revenues in 2022 | $31.61 Billion |
Netflix Employees | As of December 2021, Netflix had 11,300 full-time employees located globally in 60 countries |
Revenues per Employee | $2.62 Million |
Who owns Netflix? | The main individual owner is co-founder and CEO Reed Hastings, with 1.79% of the company’s stock |
Netflix started as a DVD rental business back in the day.
However, the company understood from the early days that the market was transitioning from DVD to the Internet as it went through its IPO in the early 2000s.
To something that would have displaced entirely the underlying technology (DVD) that Netflix was using at the core of its business model.
The interesting part is that as soon as streaming became commercially viable, Netflix successfully transitioned to a streaming model by redefining it via binge-watching.
Another important change was the transition from the aggregator (a company primarily distributing other people’s/networks content) to becoming one of the most important producers in the world (today, most of the shows and series on Netflix are produced by the company).
Now, another core change is going on in the next ten years, which is a business model change.
Netflix is expanding its business model to advertising to scale to a billion members worldwide.
And it’s once again refining its model to go beyond TV series as competition has arisen in the last years.
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