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How is Netflix making money from its original series?
How is Netflix making money from its original series?
2 Answers
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Netflix nowadays produces a large number of original content quickly this is because they hire different production companies. Netflix does not make the content themselves they distribute the work among the production companies. In the same manner, Disney does not make Star Wars or the avengers they just finance and support Lucasfilms and Marvel studios. Each original show that you see on Netflix has its own studio that works for Netflix.
Netflix mainly acts as a financier and distributor of these
original shows. In other words, they generate a project and finance it and in exchange, they get special distribution rights of the show, among other things that can be negotiated. The actual production or filming of all these projects can be done by other partners or production companies. Netflix does not essentially need to oversee the integrity of the actual production stage of a project, usually, someone else is hired to do that. Then when the projects are completed with production they go back to Netflix and present them with the final product, depending on creative control, certain parties will have more authority on final cuts and
creative decisions. So, depending on that part, they can call for reshoots or develop the project more, or move ahead and line it up for
release. They are reportedly targeting to produce an unprecedented 80 original films and about 700 original TV shows in 2018 alone.
This the actual reason why Netflix now produces a huge number of content of original shows and movies quickly.
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Growth of Netflix- the premium OTT platform
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Netflix was founded in 1997 by two American entrepreneurs, Reed Hastings and
Marc Randolph.
Netflix is currently the world's largest ott streaming service. It has a vast catalog of content. It has a library of more than 3000 films and shows of various genres. About 40% of the content hosted on the platform is Netflix's original series.
Read also: Is Netflix producing pure junk content?
Money-making Strategy of Netflix
No wonder Netflix makes ravishing money and has succeeded in replacing cable connections effortlessly. one question that strikes the mind is how does Netflix make money?
Netflix's money-making strategy can be explained as below:
'rather than collecting income from a single title, Netflix's major business strategy lies at the core with subscription-based video monetization. a major part of the revenue is generated by its own licensed and self-produced content assets, that is the Netflix originals.'
Netflix Originals- The major revenue generator
The most popular Netflix original series Stranger Things, Black Mirror, and
Narcos grew with a subscriber base of above 50000 across the globe.
Some Netflix original series have also received awards, thereby adding to the prestige of the platform.
Though this stature does not make direct money for the service, it does the work of attracting more subscribers to the platform.
Read also: Why is Netflix spending on original content?
There are also some Netflix originals that the platform had distributed through limited theoretical release(example- Klaus, Marriage story).as a result, the company gets cuts from the box office.
It has been found that the audience prefers watching the original content on the platform to leased content. All these factors enable Netflix to generate a hefty sum of revenue by producing more of its original content.