Business of 25 thousand crores spread across 190 countries, how does Netflix earn so much money by showing films?

New Delhi: Nowadays OTT platforms are in vogue and if we talk about the most favorite streaming platform of the audience, then Netflix comes first. Netflix is ​​the world’s largest streaming service. But do you know that till this year Netflix’s market has been 252.71 billion dollars or about 25 thousand crores?

Netflix has 260 million paid subscribers all over the world, which is just a little more than the population of America. In 2023, Netflix’s revenue was 33.7 billion dollars. If seen, Netflix is ​​very big. But not one but many questions arise – how did it become so big? How does Netflix earn money, or rather how does it earn so much money? What is the business model of Netflix? Today we know the answers to all these questions.

When was Netflix created?

Netflix is ​​a subscription based video on demand OTT streaming service. It offers TV shows, movies, documentaries and many original content. Netflix came into existence in 1997 and was created by America’s Reed Hastings and Marc Randolph as a DVD by mail service.

Netflix has come a long way since then. It is different from its original work of selling DVDs and is currently one of the most popular streaming services in the world. You can guess its popularity from the fact that Netflix has 260 million subscribers from more than 190 countries around the world.

How does Netflix work?

Netflix is ​​like a big digital library, which contains movies and TV shows, which you can access through the Internet. Let us know in simple language how Netflix works. First of all, you have to install the Netflix app and sign up for a subscription.

You will get many subscription plans from which you can choose the plan of your choice. Talking about Netflix’s subscription plan in India, there are plans for 4 months – Rs 149 for mobile, Basic plan Rs 199, Standard plan Rs 499 and Premium plan Rs 649. Once subscribed, you can browse the catalog and watch whatever you want. You can also download content and watch it later.

How does Netflix make money?

Netflix’s sources of earning money are subscriptions, partnerships and ad revenue. Netflix’s subscription consists of three plans – Standard with Ads, Standard Without Ads and Premium, which are usually for one month. The largest part of Netflix’s revenue, i.e. about 90%, comes from subscriptions and strategic partnerships, while about 10% comes from advertisements.

How much money does Netflix make?

Netflix’s revenue in 2023 was $33.72 billion, and this was 6.7% more than 2022. In 2022, its revenue was $31.61 billion. In 2023, Netflix had a profit of $5.4 billion, while in 2022 Netflix had a profit of 4.5 billion.

How much does it cost to run Netflix?

According to the data, it cost $25.98 billion to run Netflix in 2022. This may sound like a lot, but Netflix can easily spend this much on its operations, as its gross revenue in 2023 was $33.7 billion. Netflix has to spend its revenue in many places.

These include licensing costs, production costs, marketing costs, research and development costs, technology and development costs and other expenses. Only after spending so much do you get a smooth watching experience on Netflix. Many OTT platforms like Amazon Prime Video, Disney Hotstar, Zee5, Jio Cinema also earn in the same way.