During 2021, Netflix’s net worth was around $176.07 billion and it was there to provide video entertainment for those who were bored. You may be considering opening your own streaming service, or you might be considering how your advertisements could be included on streaming platforms. Either way, it’s important to understand how Netflix and other streaming services make money.
Subscription Services
Let’s start with the most obvious way that many streaming services make money. Streaming services like Netflix, Hulu, Amazon Prime and Disney Plus make their money by asking customers to pay a monthly or yearly fee to access their products. These services include more than just their own original video content. They may advertise movies, series, documentaries and old shows to bring in a range of customers. With the amount of content available, it’s more likely that they will appeal to many different target audiences. As long as they continue to update their services with interesting content, subscriptions will continue to provide income.
Plan Levels
When customers purchase Netflix, they have the option to have the service personalised to suit the number of screens in their home. Some people may like to watch Netflix on their phones, whilst others may want to see their programmes on a big screen. That’s why they can choose a package that can allow for Netflix to be displayed on several screens at once. The account can also contain different profiles. That way different people can use Netflix and have the algorithm find the best programmes for them. Some people find this personalization to be worth a little extra on their bill every month. This is how Netflix can make more money easily.
Advertisements
Although Netflix does not advertise on its platform, streaming services from the BBC iPlayer, ITV and Channel 4 have a few minutes of advertisements before different programmes begin. Some streaming services may ask marketers to produce smaller versions of their TV advertisements, others may allow marketers to use linear addressable advertising. This means that advertisers can use a one-on-one system through subscription data to show their advertisements to the best target audience. Advertisers need to pay the streaming service to display their advertisements. Therefore, it is likely the streaming services will earn more money.
DVD Rentals
Did you know that Netflix does offer a DVD rental service? This service has been available since 1998 and has allowed 5 billion DVDs to be sent out to happy customers. Netflix offers DVD subscription services, where customers can sign up and order a movie disc to be sent to their home. If the customer is also subscribed to their streaming service, this will add to the amount that customers pay for access to the latest shows, movies and documentaries. Therefore, more money will be made.