Question

Please give a detail explanation of Netflix's finances from 1997 to 2018 and the development they made to advance themselves towards more revenue.

Answer 1

SOLUTION IS-

Detail explanation of Netflix's finances from 1997 to 2018 is given below:

For the fiscal year 2018, Netflix reported earnings of US$1.21 billion, with an annual revenue of US$15.8 billion, an increase of approximately 116% over the previous fiscal cycle. Netflix's shares traded at over $400 per share at its highest price in 2018, and its market capitalization reached a value of over US$180 billion in June 2018. Netflix ranked 261 on the 2018 Fortune 500 list of the largest United States companies by revenue.

On October 1, 2008, Netflix announced a partnership with Starz to bring 2,500+ new films and shows to "Watch Instantly", under Starz Play.

In August 2010, Netflix reached a five-year deal worth nearly $1 billion to stream films from Paramount, Lionsgate and Metro-Goldwyn-Mayer. The deal increased Netflix's annual spending fees, adding roughly $200 million per year. It spent $117 million in the first six months of 2010 on streaming, up from $31 million in 2009.

On July 12, 2011, Netflix announced that it would separate its existing subscription plans into two separate plans: one covering the streaming and the other DVD rental services.The cost for streaming would be $7.99 per month, while DVD rental would start at the same price. The announcement led to panned reception amongst Netflix's Facebook followers, who posted negative comments on its wall.Twitter comments spiked a negative "Dear Netflix" trend. The company defended its decision during its initial announcement of the change:

"Given the long life we think DVDs by mail will have, treating DVDs as a $2 add-on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited-DVDs-by-mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs-by-mail offering.

In a reversal, Netflix announced in October that its streaming and DVD-rental plans would remain branded together.

In January 2018, Netflix named Spencer Neumann as the new CFO.

The development they made to advance themselves towards more revenue is described below:

Its growth and ability to break into well-established industries – first video rental, now television and film – is a rare accomplishment. In my book “Portals: A Treatise on Internet-Distributed Television,” I explore how Netflix and other internet-distributed video services forced the existing television industry to radically change its practices.

At the same time, many have struggled to understand Netflix’s strategy. With other services entering the video on-demand market, but has Netflix attained the desired quality in following ways:

1. The seeds of niche TV

When Netflix first launched in the late 1990 s, it distributed DVDs – mainly films – by mail. The convenience of the service disrupted the existing film rental industry and eventually led to its demise

2. Different model, different strategy

For years, television was distributed by broadcast wave – a revolutionary technology that sends a wireless signal over huge swaths of the country. But broadcasting technology can send only one message at a time to everyone in its range.

3. Netflix’s nooks and crannies

Netflix has adopted what I call a “conglomerated niche” strategy: It develops programs for a handful of – maybe a dozen – different audience interests. These include complicated serial dramas (“House of Cards”), action series (“Daredevil”), horror series (“Hemlock Grove”) and exclusive films starring a popular actor (Adam Sandler).

4. A quest for global domination

Some in the U.S. have doubted whether Netflix can maintain its market dominance based on a seeming lack of innovation and erosion of its U.S. library in recent years.No television distributor has ever been able to reach a truly global audience. Netflix’s experiment as a global, subscriber-funded television portal may be the next chapter of television history.