The Reasons Behind Netflix’s Success

by George Sams

To be more precise, there were 58.5 million Netflix users in the US and 78.5 million subscribers internationally. For the sake of comparison, in 2012 the number of international subscribers barely surpassed 20 million. As of February 2018, there were around 3.98 million Netflix users only Down Under.

While some of them use the regional Netflix service, others turn to a VPN service in Australia to get access to more content.

While other streaming services are making a massive effort to follow suit, Netflix remains the leader in most regions.

In this article, we’re going to explain the reasons that lie behind this business success.

First come, first streamed

When Netflix started in 1997, they distributed DVDs by snail mail. They were the pioneers of the DVD-by-mail service. One move that they did then that has been their leitmotif ever since: relying on the back catalogue of studios and production houses.

In a nutshell, they approached these media conglomerates expressing their desire to buy the licenses for older TV-shows and movies. As a result, people had a chance to order some titles from Netflix that they couldn’t find at the local video stores.

Studios, on the other hand, were able to make some extra money from these sales.

That way, when Netflix started streaming their content, they already had the publishing rights to a large number of shows and movies. Even now, you can watch Cheers, Twin Peaks, or other classic shows on Netflix.

However, some of these shows are still restricted to some regions. In line with that, the Netflix-loving Americans are more likely to be able to watch old shows than the Aussies.

However, Australians can access the content of the US Netflix through a VPN at home in Australia.

Low prices, high revenues

The fact that Netflix managers were buying back catalogues at a fraction of the cost is only one aspect of their financial policy. When they began, they also had a flexible return policy by allowing people to return a DVD within a three-day time.

It’s also important to say that they began their online streaming service in 2007. It was at this time that LCD TV sales started growing in the US, as well. So, now people were able to stream media content directly from Netflix to large TV-screens.

Furthermore, all this coincided with the beginning of the recession in 2008. People, especially families, had to cut on their expenditure. It was cheaper to watch something on Netflix than to go out to the movies.

Due to the low-price, high-revenue philosophy, Netflix turned out to be an affordable and reliable source of fun for the entire family. The key point of this strategy is to keep the price of a single package low, and the high revenues will come as a result of numerous subscribers.

Over the course of years, they’ve kept a modest price policy, which has attracted millions to use their services.

Original content, smart software

In 2013, Netflix pundits realised that it was time to push the envelope, just like they did with the red-envelope DVD-delivery in 1997. So, they decided to produce their first original TV-series – House of Cards. The star-studded crew behind and in front of the camera was the guarantee that this show would win over new audiences.

When it was time to stream the first season, they made another innovative move – they released the entire season at once. Unlike cable TV and satellite channels, Netflix realised that they could make all the episodes available at the same time. That way, their subscribers were able to binge-watch the entire season.

The tremendous success of House of Cards led to new productions, such as Narcos, Stranger Things, The Crown, and many other titles.

Along with making their own TV-content, Netflix invested in smart software. It tracks subscribers’ watching habits and provides them with tailor-made recommendations for further watching. As a result, Netflix users don’t have to waste time searching through the catalogues. They can simply watch the recommended content.

What’s more, the data gathered by this AI-enhanced tool gave the idea to Netflix managers to produce new seasons of some old series. They realised that a large number of people were watching Arrested Development and Gilmore Girls again and again. That’s why they produced two new seasons of these two classic shows. It seems that the revival of some old series based on users’ queries has only started.

One network, the entire globe

Today, Netflix is available in more than 190 countries, which makes it one of the most widespread global brands. No matter where you are, you can choose one of the three current plans and watch your favourite media content.

Still, it’s important to know that not all the shows are available in all the regions. Netflix has to pay licenses for every bit of content they stream. For some large markets, like the US, it pays off to offer subscribers more titles. That’s why Netflix for the US market contains the largest library.

In other regions, especially the ones with streaming limitations or those scarcely populated, they provide fewer TV-shows. For instance, in Australia, people can watch the content that’s adapted to their region.

Still, it’s possible to get a VPN in Australia and gain access to Netflix in other countries. This option is available in other parts of the world, as well. Now that Netflix makes TV-shows in Spanish, German, and other languages, their users might want to access that content, as well.

So, people who want to use Netflix should first check out the offer for their region and then see how to access the content of their interest.

Conclusion

Watching something on Netflix from the comfort of a living room after a hard day at work is a real treat. As the company is growing, their services are getting even better. At the moment, their subscribers get pretty accurate recommendations on the basis of their watching preferences.

Since the original Netflix production is on the rise, people get high value for money. This has been the philosophy of this streaming service from the very beginning. As such, it contains all the reasons behind Netflix’s success. From this point of view, it will keep attracting new users in time to come. Moreover, by using a VPN, you can access all the Netflix content you wish.