Netflix | Working And Earning Model

What is Netflix?

Netflix is the original major streaming option for home television audiences. When it started nearly 20 years ago, Netflix was a subscription-based DVD service that would mail DVDs straight to your home. It still does that too (more on that later), but in 2007, Netflix debuted its streaming service, allowing viewers to watch thousands of on-demand TV shows and movies ad-free. Ten years later, Netflix has become one of the biggest names in entertainment, producing critically acclaimed TV shows (Daredevil, House of Cards, Stranger Things, and Luke Cage, to quickly name four) and movies and hosting original comedy specials.

Netflix now offers up a wide range of content across every genre you can imagine. From full seasons of today’s hottest TV shows to classic movies, Netflix has more entertainment than you could ever possibly watch.

How does it operate?

This company is based on a subscription-based model. The users pay for a monthly subscription plan and are given access to stream shows, movies and other content available on Netflix they pay for.

In the streaming business, Netflix provides three types of membership streaming plans for their users that differ by quality and the number of screens at a time.

Standard Definition Plan(640 x 480p) It includes access to standard quality streaming on a single screen at a time.

High Definition Plan(1,280 x 720p) It includes access to high definition quality streaming on two screens concurrently.

Ultra-High Definition Plan(3,840 x 2,160p) It includes access to high definition and Ultra-high definition quality streaming over four screens concurrently.


The first 30 days are free for new members, but if you feel that you are enjoying Netflix, then you can remain a member. Netflix provides three membership plans to suit your needs. So, just ‘Pick your price, and pick your plan.’

You can pick up a plan that suits you and also specify the number of users who can stream at the same time. In addition to this, your selection will also determine whether you can view Standard Definition [SD], High Definition [HD] or Ultra High Definition [UHD].


1. Basic Plan: It is the Standard Definition plan, in which you can watch on 1 screen at a time.

2. Standard Plan: This is the High Definition plan, and you can watch on 2 screens at a time.

3. Premium Plan: This contains both The High Definition as well as the Ultra High Definition and 4 devices can be simultaneously used.

There is an exception to this. The DVD Plan. This plan is only available in the US. US customers can sign up for a DVD-Only plan or even add DVDs to their current streaming plan.

Do I get a free trial?

Yes, Netflix lets you test-drive the platform for an entire month before charging you. However, you still need to enter your credit card details or PayPal information when you sign up. You can cancel your subscription anytime during your first free month. If you fail to do so before your trial expires, you will be automatically charged for the next month.

Netflix is pretty transparent when it comes to sending reminders as your trial nears its end, but it’s also a good idea to set a reminder for yourself so you don’t end up paying extra if you’re not enjoying the service.

How does Netflix makes money?

Subscriptions are the primary source of revenue for Netflix.

Subscribers pay to access content on Netflix and to get DVDs delivered to them, and that is how the company makes money. The only revenue source for Netflix is the Monthly Membership Fees. The company offers three different plans for users based on the streaming quality of the content provided. The plans are – Basic (can be streamed in Standard Definition), Standard (can be streamed in High Definition), and Premium (can be streamed in Ultra High Definition).

Of course, the costs of these plans differ across the globe.

Convenience – Viewers can choose to watch either a single episode or an entire season in one sitting.

Cost – Generally, subscribing to several Video On Demand services comes out much less expensive than signing an agreement for basic cable. Every fourth household in the US has a Netflix subscription – that’s why they can sell so cheap. Also, Netflix is spreading like a wildfire around the globe.

Content – Many Video On Demand customers quote the diversity and quality of content offered by Netflix as a major reason for switching from conventional cable television.

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