Understanding the Netflix Business
A deep dive into how Netflix operates, from its revenue streams to its content strategies.
Problem Statement: To analyze Netflix's vast content library to uncover strategic insights into its business model, content acquisition, and global market positioning. This dashboard visualizes key trends to demystify the decisions that shape the world's leading streaming service.
Dataset: The analysis is based on the publicly available "Netflix Movies and TV Shows" dataset from Kaggle, which contains 8,807 rows and 12 columns of metadata about the content available on the platform.
- Pandas: For data cleaning, manipulation, and initial exploratory analysis of the raw dataset.
- Excel: For preliminary data validation and organization before in-depth analysis.
- Tableau: For creating the interactive and embeddable data visualizations that power this dashboard.
Netflix's primary source of revenue is its subscription-based model. Users pay a monthly fee for access to a vast library of content. This predictable income stream allows Netflix to invest heavily in acquiring and producing new content.
For example, a subscriber in the United States might pay between $6.99 (with ads) and $22.99 (premium plan) per month. With over 270 million subscribers worldwide as of early 2024, these small monthly fees aggregate into billions of dollars in annual revenue, funding blockbuster productions like 'Stranger Things' which can cost over $30 million per episode.
Shows and movies leave Netflix due to the expiration of licensing agreements. Netflix doesn't own all the content on its platform; it often licenses it from other studios for a specific period. When that period ends, the rights holder can choose to renew the deal, let it expire, or move the content to their own streaming service.
A classic example is the show 'Friends'. It was a huge hit on Netflix for years, but Warner Bros. Discovery eventually chose not to renew the license and made it an exclusive flagship show for their own streaming service, Max. This is a common strategy as media companies launch their own competitors to Netflix.
Content availability varies by country due to territorial licensing. A production studio might sell the streaming rights for a show to Netflix in one country, but to a different company or TV network in another. These deals are often made long before the rise of global streaming platforms.
For instance, 'Star Trek: Discovery' is a Paramount+ original in the U.S. but was distributed by Netflix internationally for its first few seasons. This is because the international distribution rights were sold to Netflix before Paramount+ existed as a global service.
Netflix has become a major Hollywood studio, producing a vast amount of "Netflix Originals." This gives them complete control over the content and its global distribution rights, meaning they don't have to worry about licensing deals expiring. They invest billions each year into creating original movies and series across all genres.
The production of a global hit like 'The Crown' is a massive undertaking. It involves large international casts, filming on location in multiple countries, and meticulous historical research, with each episode costing millions of dollars. By owning the show outright, Netflix can ensure it's available to all its subscribers, everywhere, forever.
Licensing is the process of acquiring rights to show content owned by other companies. These deals are complex and costly. Netflix must negotiate fees, the duration of the license, and the specific regions where it can stream the content. This is why a show might be on Netflix in the UK but not in Japan.
Think of the deal for 'Seinfeld'. Netflix reportedly paid over $500 million for the global streaming rights. This was a strategic move to secure a beloved, highly re-watchable sitcom that can attract and retain subscribers, even though the show is owned by Sony Pictures Television.