MIDDLEBURY, Vermont: Even in the wake of a recent mixed earning report and volatile stock prices, Netflix remains the media success story of the decade. The company, whose user base has grown rapidly, now boasts almost 150 million global subscribers.
You could pay with your attention by consuming ads alongside “free” radio or television programming; Or you could subscribe to cable TV, and pay a large monthly fee to access an array of scheduled programming. This makes Netflix distinct from other media companies that use highly profitable hits to generate revenue. This will then subsidise the production of new films, television shows, albums and video games.
Even though it reported a record US$1.2 billion in profit in 2018, those profits are based on an accounting model that ignores many costs and debts. This has led some financial analysts, like NYU professor Aswath Damodaran, to believe that Netflix’s business model is unsustainable. Media commentator Matthew Ball argues that Netflix is in a race with the social media giants to occupy “every minute of leisure time available.”
Such obsessive interface tweaking helps promote programming – as Ball notes, “the most valuable real estate in the world is the top fold of Netflix homepage.” But it doesn’t generate revenue. Netflix logs everything you have ever watched and how you watch – every time you pause, what programmes you consider watching but choose not to and when you’re most likely to binge on “Friends” reruns.