The Business Model of Netflix, Subscription-based streaming service offering original, licensed content globally, for users.

What is the Business Model of Netflix?

Introduction  –

The Business Model of Netflix, Subscription-based streaming service offering original, licensed content globally, leveraging tech. for users. Through this article, we will try to know the business model of American company Netflix. In which you will know how the company’s journey was from the inception of this company till now. Netflix entered India in 2016 before which the company could not use its business model in India due to internet speed problems in India.

Internet has reached all over India after 2017 through Reliance Jio’s free internet plan. Which was very important for an American company like Netflix, it was very important to get internet facilities in India for technology-driven means like Android mobile and other technical means, we saw this work through Jio. Earlier the use of internet was limited only to the cities, which has started reaching the villages today and there is still a lot of room left for it to grow.

In the entertainment sector, we have seen the previous generation by going to the traditional cinema hall and watching cinema, but in today’s era it is the OTT platform which proves that the customer is the king of the market. With the arrival of Netflix company in India, its major competitors are Amazon company of America and established companies of India which will compete with these American companies on OTT platform. In the coming future, this area has the power to earn more money than cinema halls, so we will see its case study through Netflix company.

What is OTT Platform?  –

Over the top These streaming services are accessible to people through the Internet, for which we need to have Internet services. People in India see more of these services through Android mobile. That’s why we used this service the most through lock down in the time of Covid-19 and the medium of entertainment of multiplex cinema suddenly started shifting from OTT platform in priority and all the movies of India to be screened in cinema houses first. Had to work hard.

Small budget films used to be very difficult to compete with big budget films, but through the OTT platform, such films are available to a large customer base of the world. Hence the introduction of OTT platform to the monopoly of multiplex cinema houses in the Indian market, a new alternative has become available for things like cinema, short films and documentaries. Through this article, we will see the case study of this company Netflix, in which we will try to know the complete information about the company.

Through the OTT platform, we have to compete with Indian companies from American companies like Netflix, Amazon and World Disney, so that the audience will get to see good content. This service is a powerful alternative to traditional television channels in which viewers decide for themselves what they want to watch. Earlier, TV channels had to watch what they wanted to show through cable TV, but the OTT platform has changed the entire face of the entertainment market.

History of Netflix company  –

Netflix was founded on August 29, 1997 in the city of California, USA, with the founders of which were Mark Reindolph and Rid Hastings, whose main objective was to give films to the people through rental service. Netflix started with 30 employees and made this service available to the people by creating a catalog with 925 movie titles. After this, seeing the success of the Amazon company in the era of dot com, the DVD business was changed to a business model through subscription.

As of March 2022, Netflix has 226 million subscribers, and 50 percent of this is from the US alone. From this we can guess how the Netflix company has made its business successful. For the last few days, its customers in America started decreasing a lot, but still it is considered to be America’s largest OTT platform company. Their founder decided to shift to the Internet seeing the change of time, this was a very important decision.

Netflix’s business today, from Australia to Asia, Europe, Africa, Netflix has spread its business for the last ten years. The lock down of 2019 has shown a new direction to the internet sector and many internet related businesses we see that have grown very fast in the last two years. Which has also benefited the Netflix company, mainly in India, Netflix has got a huge market, due to which it has been beneficial to grow its business in a country like India from many other countries.

Netflix Company Info  –

  • Company Name – Netflix
  • Business Type – OTT Streaming Platform
  • Company Type – Public Company
  • Company Establishment – 29 August 1997
  • Company Head Office – California, USA
  • Business Area – Whole world except China, Russia, North Korea, Syria
  • Founders – Rid Hastings and Mark Randolph
  • Services – Film Production, Distribution, Television Production and Distribution
  • Origin of company – 29. USD 7 billion (2021)
  • The company’s net worth – USD 44.5 billion (2021)
  • Company Employees – 12135 (2021)
  • Subscriber – 22 crore 60 lakh

Business Model of Netflix Company  –

The company’s business model on the OTT platform is based on the subscription of the customers, so that by setting the amount on every registration, this subscription company sells according to the plan. When we watch any cinema or series on this platform, then we do not get to see any entertainment. Youtube this platform provides free services where anyone can come and upload their videos or create their account.

This YouTube company earns money through its income promotion, same Netflix it is a bit expensive than other OTT platform, but this advertisement is free so that you can watch any entertainment program without any interruption. Earlier we used to watch cinema in India through cinema houses, but we can also show cinema through OTT platform.

Netflix it is the most successful in America and they get more customers from America itself, even though the subscription is decreasing a bit for a few days, the main reason is that alternatives are being made available to the people at a lower cost by the rest of the options. Since 2016, the company has got a big customer work like India, so that it can fill the loss here in America and the interest of the people is also seen a lot for Netflix.

Market Strategies of Netflix Company –

This feature that allows customers to watch their movies and series on the OTT platform without any hesitation is one of the most important reasons for the success of Netflix. OTT platform being a part of this technology sector, there is not much problem of profit of margin here. Due to which the company has the freedom to increase more or less the charges for that membership. Which the company has taken advantage of in the early days in America.

In the US, Netflix has seen a slight cut in subscription due to the cheaper rates of other companies. Netflix’s entry in India This has been a good decision for the company in 2016 to minimize the impact on the US business. Nevertheless, more than 50 percent of the company’s income comes from America and this evidence in India is expected to grow significantly in the future.

The timing of the company’s shift from its DVD rental business was significant in view of the success of companies such as Amazon on the Internet platform. The most important factor in the success of the company has been the lockdown which was done around the world during the Corona times, which has resulted in good internet business and due to which the company’s subscription is very fast. Being a light model of business, the company does not need to struggle much for profit of margin.

Competitors of Netflix Company –

  • Amazon Prime
  • Apple TV
  • HBO
  • youtube tv
  • Disney Plus
  • Netflix Competitors in India
  • Amazon Prime
  • Disney Hotstar
  • Sony Liv
  • jio cinema
  • eros now

Netflix has established itself well in the US for the last ten years, mainly because this strategy was very important to entertain people without any advertisements. The company had successfully replaced the Netflix brand with its previous DVD business. Therefore, despite being an international company, 50 percent of the company’s income comes from America. To change this dependence, the company is making a strategy to position its business well in foreign countries.

Netflix has performed well in India since 2016 and has established itself on the OTT platform. Netflix’s most important competitor in India is Amazon Prime because it is the most powerful company in the world and is considered to be very innovative in terms of technology. The company did not have to work very hard to compete with other Indian brands as it has been able to create good production for the company by investing its own money in producing movies and TV shows.

Start of Netflix Company in India  –

Netflix arrived in India in 2016 but the most important factor in its success was due to Jio’s free internet access service which was aired by the Reliance company during this period. Earlier the company wanted to enter India but due to limited internet services to some major cities in India, it decided to come to India in 2016 in which the company was facing some competition in the US, because of its subscription. Rates were higher for other companies.

After entering the company in India, first through LLP registration in 2017 the company established its head office in Mumbai with 40 employees. Netflix company’s non-promotion feature first attracted the elite class of major cities of India because its rates were much higher than the beginning, but due to it being less than Dish TV, it was beneficial for the company and the company did very well. Got response.

The main difference between finding customers in many other countries and finding customers in India is that in India, more customers are found in very less cost and the rest of the company’s expenses are saved. After 2020, Netflix’s subscription, in India has grown very fast, which has benefited the company and the increasing subscription, in major cities of India gradually started expanding to the suburbs. The company started showcasing TV series and films in the manufacturing sector in India, which has resulted in better results for the company.

Impact of OTT Platform on Entertainment Industry-

Traditional Dish TV and multiplex cinema The concept was, in a way, with the customers in control of themselves decide what to show to the customers. The OTT platform has used the concept that the customer is always the king of the market, by providing him the convenience of watching entertainment through the OTT platform on mobiles, laptops and TVs at his own cost, thereby enhancing the business and multiplex culture of Dish TV. There has been a lot of shock.

Earlier no one used to ask small films and documentaries and big production houses dominated the multiplex theaters, which we hope to see the right competition through the OTT platform. Because credit should be given to those who are good, according to this, if the content of small and low budget films and web series is good, then people definitely make it successful, this OTT platform has proved it.

A lot of movies are now being streamed directly on the OTT platform, thereby reducing the dominance of multiplex cinema houses and giving the benefit of competition to the customers to watch good content. There is no time limit to watch any movie or web series on OTT platform, whenever the customer wants, he can watch on mobile, laptop or TV. Going to the cinema houses to watch movies has become very expensive, the result of which we get to see.

Most importantly, people’s ability to watch a serial or a movie for a long time has decreased and they have started giving priority to content over short films and short time entertainment, the most important example being the success of means like Tiktop and Instagram.

YouTube Vs Netflix  –

YouTube This is a subsidiary company of Google and the strategy of making money from Google is the same strategy Google uses for YouTube. YouTube is a video platform like Netflix is ​​the business model of the company, but the strategy of both to earn money is different. We get a free subscription on YouTube and the YouTube channel which is successful in generating more traffic, takes a share through YouTube advertisement and YouTube’s main income is the way of earning.

Netflix is ​​a subscription base OTT platform, but its main source of income is that for every subscription, the customer has to spend money to the company. Showing movies and web series to customers without any commercials is the most important reason for the success of Netflix. This means that the business model of YouTube and Netflix is ​​completely different in spite of this same field, the path of earning income.

It is not that the paid services of YouTube are not available in India or are not available in other countries. But due to the availability of the free platform, its paid YouTube is not getting much success, but due to the success of the YouTube company’s free model, the company also does not mind the failure of the paid model. YouTube is seen as the most successful social media medium in the world in terms of video viewing and it attracts ordinary film and documentary producers as an OTT medium.

Features of Netflix Business Model –

  • The Netflix company started its business by providing rental DVD services in the US in 1997, founded by Mark Reindolph and Rid Hastings.
  • In view of the success of Internet base company like Amazon, Netflix company took the important decision to transform the business through OTT platform.
  • The main reason for the success of Netflix has been to make movies and web series available without any advertisements.
  • Netflix company started its business in India in 2016 and registered through LLP in 2017.
  • Netflix company’s major competitors in the international market are Amazon Prime, Disney Plus O and Indian platforms like Sony Liv and ZEE 5 in India.
  • Netflix and YouTube are the opposite business models of making money in which OTT platforms have successful companies.
  • Netflix company keeps its data stored through Amazon cloud computing, it does not have its own storage company and the most important thing is that both the companies are competitive companies in the OTT platform sector.

Conclusion –

In this way we looked at how Netflix established its business in India and studied the potential for the company to be more successful in India in the future. It is basically an American company which started its business with a DVD business which was very successful in America but it did not see any profit for the first six years.

Netflix has taken inspiration from the success of a company like Amazon to make its business model successful and has brought itself into the OTT platform services space at the right time from the DVD business. America has seen a lot of ups and downs in the last 25 years, but by taking the right decisions on time, the company has found itself on the path of success. The company has entered India at the right time, at which time the internet had reached all the regions of India through Jio.

The company’s business model is very different from the YouTube business model because YouTube’s main income route comes from advertising, while Netflix’s main income route is based on the registration fee of the customers, including monthly and yearly subscriptions for this plan. is available. The business of the proposed Dish TV and Multiplex Cinemas has been impacted the most by the OTT platform and the company has benefited from it.



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