We all know that the world is moving towards digitalization. The education, Marketing, advertisements all are using digital techniques to grow their business. Likewise, the user also prefers entertainment through digital media.
In previous days peoples like to watch serials, movies, videos, on TV But after the digital revolution, peoples like to watch shows on mobiles through OTT networks.
Here are some Interesting business model-
NETFLIX is an OTT network, in which the user can watch shows/movies according to their subscription. It is like an online paid TV.
OTT networks are called as the Over The Top networks. In simple OTT is a network which provides a content like the delivery of Films and TV content via the internet. Hotstar, amazon prime, HBO shows, Netflix etc.
If we talk about the OTT( over the top) service providers, Netflix is one of the largest OTT network provider.
Netflix company is a giant of all the OTT networks, which has acquired approx 40% of the OTT shares in the world.
Founded by Reed Hastings and Marc Randolph on 29 August 1997, and launched its IPO (Initial Public Offering) of $ 309Million in the year 2002, having employees up to 5000.
So, rather than diluting the products of the company, they take a funding from the different company. They had also acquired companies such as Millarworld, Roku and Milk VFX.
The best thing from the acquisition is that Roku was one of the competitors of Netflix and after some time Netflix acquired this competitor. Later Netflix finds that acquiring a Roku was not a profitable deal and decided to sell it.
How Netflix earn money?
By DISC rental services-
By online, This company provides a monthly flat-fee for DVD and Blu-ray rentals. A subscriber takes film DVD on rent, by giving specific prices. This DVD’s are delivered by the postal services. The subscriber can keep a rented disc as long as desired, but there is a limit on the number of the disc that subscriber has in a one time. Currently, in the US Netflix’s disc rental memberships range from $7.99 to $19.99/m, including a free one-month trial with unlimited DVD exchanges.
By Subscription Fees-
This OTT network provides a free trial for 1 month, after completion of the trial period user want to buy a subscription plan.
Basically, Netflix subscription plan is divided into 3 parts such as Basic, Standard, and Premium.
If we talk about the audience target, Netflix target the audience between the age of 18-34 and 35-54. Simply the audience such as students and who wants a ready-made content on the website or app.
Where they Invest-
This OTT network produces there own content in form of OTT series, videos, and movies such as drama, Marvel series, comedy, animation, mini-series, anime, kids, and family, live action in different foreign languages.
2- Advertisement and Marketing-
One of the biggest reason for Netflix Giant customer base is marketing and advertisement. They are investing lots of money in the advertisements over the different social networks such as Facebook, Youtube and many more.
On youtube, almost 80% of the video begins with the Netflix ad. This OTT network also runs a huge ad campaign on the facebook also.
3- Licencing Cost-
In order to stream your favorite shows and movies legally, Netflix wants to invest a money to acquire a license provided by Regulatory Framework for Over-the-top (OTT) services.
4- Technology and development cost-
There are millions of user that watch Netflix content at a time. To make their experience smooth and fast Netflix want to keep partnering with hundreds of the ISP’s (Internet Service Provider), which involve huge cost Technology and development cost also includes a streaming delivery technology cost and cost required to develop and design new devices.
5-Innovative work cost-
Netflix is an excellent financial expert in its innovative work office. This was the biggest reason that Netflix has made a skyrocketing growth in a business.
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