The Business Of
Movies | Netflix | What Do They Do?
Morning All!
No depressing Monday GIF today - I hope you’re all enjoying your long weekend! Last week, in the first part of our The Business Of Movies series, we explored the business model of Cineworld. And looked at some of the challenges that the company and industry are going through at present.
This week we’re moving away from cinema operators. And shifting our focus to the streaming world. And where else to go - but the largest streaming platform out there. It’s the US media giant, Netflix!
The graphic below shows how Netflix does what it does. The companies creating the content are the major film studios (e.g. Universal Studios, Walt Disney Studios) and Netflix themselves. Obviously the platform the end consumers interact with is Netflix’s. However, distributing the content to us consumers is far more complex than we see! And it’ll be super interesting to dive into the relationships that Netflix have with internet service providers (e.g. Comcast, BT). And consumer electronics companies (e.g. Sony, Panasonic). That have been crucial to the company’s success!
Coming Up This Week!
So, I’m pretty certain everyone reading this is aware of Netflix. And that the company is the top streaming platform in the world. However, I wonder how many of you are aware that Netflix only began their streaming business in 2007. 9 years after being founded. And the company already had $1 billion in revenues before then.
How does that work?! What were they doing before streaming?
Well, we’ll be diving into this and more in tomorrow’s newsletter!
On Wednesday, we’ll look at the costs and relationships involved in Netflix’s operations. How much does it cost Netflix to acquire the content from film studios? How much does it cost the company to create their own content? How has the company managed to get a ‘Netflix button’ on remote controls?!
On Thursday, we’ll be looking at whether Netflix is actually profitable. After all, if they’re paying out $100m to Harry and Meghan for their content, can the company really be running a profit?? Or are they like Deliveroo and plenty of other tech companies that are yet to turn a profit…
And then finally, on Friday, we’ll look at the outlook for Netflix. With the streaming wars hotting up, how will the US media giant fare vs even bigger giants in Disney, Amazon and Apple?!
Giveaway! Just Refer 1 Friend!
Oh and just before we go, we want to give away a fantastic book - ‘That Will Never Work’.
This book, written by the co-founder of Netflix, Marc Randolph is an absolutely incredible read. It really details how Netflix went from just an idea, to a startup, to the giant it is now. It’s super easy to digest. It’s helped me understand business models. And communicate well in interviews. So I think it would really benefit a lot of you!
All you need to do to enter is refer one friend that isn’t currently subscribed to TBO. And who you think will get some value from reading/watching our stuff! We’ll record ourselves using a random name generator so everyone can see who wins!
Also, Marc Randolph just seems to be a fantastic human being. One of the ‘good guys’. His journey as an entrepreneur is so inspiring. But the way he’s prioritised his relationships is something unique I think in the business world. And again, I think it would be of huge value for students thinking about the work-life balance they want!
10th Apr 2023
That’s a wrap for today. I can’t wait to get stuck into how Netflix makes money tomorrow! Get ready for some surprises - this week is going to be a cracker.
Have a great day!
The Business Of Team