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Tuesday, September 29, 2015

Does Netflix Makes Money? Sure, But Not As Much As You'd Expect.

On the digital planet, we're all used to see big numbers and big figures. We rarely see the real numbers behind the success stories. It's all kept hidden.

I just stumbled across this Netflix report. We all know Netflix has millions of paid subscribers, and they make billions in revenues. But how about the operation expenses? Right now, Netflix is not even convering their share of bandwidth usage across content distribution servers, but let's take a look at their current (2014) numbers.

  • $3.4 billion revenues, 62.3% of the total, from domestic streaming business.
  • $1.3 billion revenues, 23.8% of the total, from international streaming .
  • $765 million revenues, 13.9% of the total, from domestic DVD business.

Of the $5.5 billion of Netflix total revenues in 2014, $3.8 billion represent the cost of revenue. Say, the operation expenses.

This results in $1.7 billion of gross profit and a gross margin of 31.8%. Netflix spent $607 million, $472 million, and $270 million on marketing, technology and development, and general and administrative expenses respectively.

This results in $403 million of operating profit and an operating margin of 7.3%. After interest and other expenses and taxes, Netflix had a net profit of $267 million and a net margin of 4.8%.

That's $267 million profit, it sure ain't bad.
But it's out of a revenue of $5.5 billion.

Read more detailed infos right here:

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