Netflix

Netflix is an American company that is a supplier of films and series based on streaming multimedia technology. Netflix has a huge number of studios, including the most famous American giants: NBC Universal, MGM, 20th Century Fox, CBS/Paramount, ABC-Disney, Warner Brothers, Lions Gate Entertainment and New Line Cinema. Netflix began operating in Russia in early 2016. As of January 2016, the company has over 69 million customers worldwide.

Performance indicators

2022: Loss of 25% of capitalization due to withdrawal from Russia

On April 19, 2022, shares of the Netflix video service fell 25% in price on the post-market after the company reported a loss of 200,000 paid subscribers in the first quarter of the year and the risk of a reduction of another 2 million subscribers.

Netflix, which has 221.6 million subscribers at the time, last reported a loss of customers in October 2011.

The company noted that the decision to suspend work in Russia, made in early March, deprived the streaming service of 700,000 users.

2021

Revenue growth by 19%, to $29.7 billion, net profit - $5.1 billion

In 2021, Netflix's revenue grew by 19%, reaching $29.7 billion, and net profit during this time almost doubled to $5.1 billion.

Netflix ended 2021 with 222 million paid subscribers, their number during the year grew by only 18 million new paid subscribers, compared with 37 million attracted in 2020.

Netflix notes that the main reason for the slowdown in the growth of the user base is the high level of competition with other streaming services. However, Netflix previously noted that companies like Apple and Disney will not be able to have a significant impact on audience growth with their streaming services.

Consumers have always had plenty of choice when it comes to entertainment. Competition has only intensified over the past 24 months as different companies around the world promote their own streaming services. While this competition may have an impact on the level of growth in our audience, it continues to increase in all countries and regions of the platform's presence, Netflix said in a statement.

As for the content being released in 2021, Netflix said the second season of The Witcher was the company's main series, unveiled by the end of December 2021. It accounted for 484 million viewing hours worldwide in the first 28 days, while Maid had 469 million hours, and the third season of You had 468 million hours for the same period. The series "Game of Squid," according to Netflix, turned out to be the most watched series ever. The Korean series gained 1.65 billion hours of views worldwide in the first four weeks after its release.

Netflix's best feature by the end of December 2022 is "Red Notice." Action comedy starring Dwayne Johnson, Ryan Reynolds and Israeli actress Gal Gadot. The film gained 364 million hours of views in the first four weeks after release. It is followed by Adam McKay's Don't Look Upstairs, which has 353m hours of views as of January 18, 2021, 26 days after its streaming debut. The company switched to total viewing hours as its primary metric in October 2021.^[1]

Seventh place in the list of the most visited sites and a decrease in the growth rate of the number of subscribers

2020: Audience and revenue growth after entering the Russian market

In 2020, when Netflix began operating in Russia, the company's revenue amounted to $25 billion against $20.16 billion a year earlier. Net profit during this time also increased - from $1.87 billion to $2.76 billion.

In 2020, the number of Netflix subscribers increased by 37 million people against 28 million in 2019. The annual increase was the largest, breaking the record in 2018, when 28.6 million people around the world paid for accounts on the service.

The increase in growth rates is associated with the COVID-19 coronavirus pandemic, due to which people have become much more likely to stay at home and watch movies on the Internet. As a result, the audience of the American online cinema by the end of 2020 exceeded 200 million users (the exact number is 203.66 million).

As of December 31, 2020, Netflix in the EMEA region had 66.7 million subscribers using paid video viewing, compared to 51.78 million a year earlier. In Latin America, such an audience increased from 31.42 to 37.54 million people, and in the Asia-Pacific region - from 16.23 to 25.49 million users.

The video service also boasted that nine out of ten places in the top of the most popular TV series of 2020 in terms of the number of Google searches were occupied by original Netflix shows. And the top ten most popular films included two films shot by Netflix, according to a press release. The most popular shows at the end of 2020 were The Queen's Move and the fourth season of The Crown.

The service spent $11.8 billion on its content in 2020. This is less than a year earlier, when the amount was $13.9 billion.

The company said it can now generate more cash than it needs and no longer sees the need for cash loans to support its growth strategy. Netflix shares rose 12% on the day the financial statements were published.^[2]

Business in Russia

• Online Entertainment Service

History

2023

Map of service popularity by country

Netflix recruits AI specialists over actor strikes

At the end of July 2023, it became known that the streaming service of films and TV series Netflix, amid the ongoing strike of Hollywood writers and actors, began to recruit specialists in artificial intelligence.

In particular, Netflix has published a vacancy for the product manager of the machine learning platform: applicants are offered a salary of $300,000 to $900,000 per year. The job description says AI will be used across all areas of Netflix's business, including helping to acquire and create "great content." In addition, neural networks are planned to be used to improve the recommendation system, which offers users personalized materials.

In addition, Netflix is looking for a technical director for generative AI in its gaming studio: the salary in this position is $650,000 per year. It is noted that text, images and videos generated based on an array of input data can be used to create original content or for advertising purposes.

The Spanish reality show Deep Fake Love, which uses deepfakes created by AI algorithms, is streaming on Netflix. And the company's gaming studio uses generative AI to compile narratives and dialogues. A separate section on the company's website says Netflix is using AI "to streamline the production of original movies and TV shows." New vacancies indicate that the streaming service intends to significantly expand the use of neural networks and large language models. Meanwhile, some market participants are raising concerns about the introduction of AI in the film industry: according to critics, the use of such technologies will create serious problems in terms of compliance with intellectual property rights.^[3]

2022

11,300 employees

Most Watched Movies

Downsizing by 300 employees

On June 23, 2022, Netflix announced that it was cutting staff again: it laid off about 300 employees. The cuts affected several business areas of the company, with the majority of layoffs occurring in the United States.

The next layoffs came a few weeks after the streaming giant, which has about 11,000 employees worldwide, carried out the first round of cuts of a similar scale in May 2022. Then Netflix laid off 150 employees, as well as dozens of part-time contractors and workers. Netflix said several more rounds of layoffs will take place in 2022 as the company tries to adjust to the much-fallen stock price.

{{quote 'Today we unfortunately let about 300 employees go,' a Netflix spokesperson said. While we continue to invest heavily in the business, we have made these adjustments to ensure that our spending grows in line with slower revenue growth. We are very grateful for everything they have done for Netflix and are working hard to support them during this difficult period. }} Netflix has lost nearly 70% of its value since announcing the loss of 200,000 subscribers at the end of the first quarter of 2022 and expects to lose an estimated 2 million more subscribers in the second quarter of 2022. On June 23, 2022, Netflix shares opened at $180.08 per share and traded at $180.93. In January 2022, Netflix shares traded for more than $600.

After an extended period of time during which Netflix easily won the streaming market, its position began to deteriorate under the onslaught of new and revamped competitors, including Disney + from Disney, Peacock Comcast from, Paramount + from Paramount Global HBO Max and from Warner Bros. Discovery. With more new viewing platforms to choose from, and high-profile and big-budget movies and TV series appearing on, Netflix is under increased pressure to attract and retain subscribers as it loses valuable content from its library to companies that bring it back and use it for their own streaming platforms.^[4]

150 employees laid off amid crisis after leaving Russian market

Netflix, amid the crisis after leaving the Russian market, laid off about 150 employees to reduce costs.

This is about 2% of all American employees of the company.

The changes are due to business needs, not individual indicators, and therefore they are especially difficult. None of us want to say goodbye to such excellent colleagues, - a service representative.

Due to the decision to leave the Russian market, Netflix lost 700 thousand subscribers in the first quarter of 2022. After that, I had to cut costs and even abandon the implementation of Meghan Markle's^[5] project^[6]

Netflix shareholders accuse service of fraud as subscriber issues lurk

Netflix shareholders filed a class action lawsuit against the company on May 4, 2022, alleging that its executives committed securities fraud by publishing misleading recommendations about slowing subscriber growth. Investors are disappointed with the company's report, in which it revealed the first loss of paid subscribers since 2011, Netflix shares tumbled nearly 40%. The company previously reported a loss of 200 thousand subscribers for the first quarter of 2022.

The lawsuit, filed in San Francisco, alleges that Netflix management did not tell investors that it was showing a slowdown in subscriber growth, particularly due to account sharing by customers and increased competition from other streaming services in the world. According to Reuters, the lawsuit was filed by a Texas investment fund against the streaming service itself and its top managers.

The lawsuit alleges the company failed to disclose that it has difficulty retaining customers and is losing subscribers on a net basis as a result.

Netflix shareholders claim that as a result of the failure to disclose this information, they suffered significant financial losses and losses as a result. The loss of subscribers to Netflix was reported on April 20, 2022.

Netflix CEO Reed Hastings said the company has an action plan to fix the situation in the company's business model itself. In particular, cheap subscription options including advertising will be added, and measures will be taken against customers who share passwords from their accounts and the quality of recommendations will be improved. In addition, the company's management plans to reduce the cost of producing its own films and TV series.^[7]

2021: Buying the game studio Night School Studio

At the end of September 2021, Netflix acquired its first gaming studio from. California Night School Studio The value of the transaction was not disclosed. More. here

2020

In the top 50 largest Internet sites in the world

Lobbying costs

Netflix reported that in 2020 it spent only $750 thousand on lobbying, compared to the maximum spending of $1.3 million in 2015. Read more here.

Launch in Russia

Streaming service Netflix has launched a Russian-language version. Localization includes not only the translation of the interface into Russian, but also a tariff grid adapted for the Russian market and presented in rubles, and not in euros. This became known on October 15, 2020.

In addition to this, Netflix is going to significantly replenish the collection of content available in Russian. According to the service, several thousand TV series and films will receive the dubbed translation. Their list for October 15, 2020 was not known.

We not only offer our service in Russian, but also inform you that content dubbed into Russian from the Netflix Originals line will appear on the platform. More Russian content will also be presented, including the "Epidemic" series, which is already available on Netflix around the world, Netflix said in a statement.

As in European countries, in Russia Netflix offers three tariff plans - basic, standard and premium, differing primarily in video quality. The cheaper the tariff, the worse the quality. The launch of Russified Netflix, among other things, ensures the appearance of official Russian-language accounts of the service in popular social networks. Profiles are registered on Instagram, Facebook and Twitter, plus a Youtube account has been launched.

Also, adapted technical support has been launched for Russian-speaking users. She receives calls and messages daily from 10 to 22 hours in Moscow.

The Russian partner of the service was the National Media Group (NMG), one of the media holdings in Russia.

The terms of the signed agreement included the translation of the service interface into Russian, the development of a tariff grid in rubles and the increase in the volume of content with dubbed translation and subtitles^[8].

Partnership with NMG to localize the service in Russia

In September 2020, it became known that Netflix plans to localize in Russia, where its partner will be the National Media Group (NMG), the video service said.

"Netflix is available in more than 30 languages worldwide. Almost five years after the launch of our English version in Russia, we are pleased to offer users our service entirely in Russian in partnership with the National Media Group. "

2019: Sixth place in watching videos on Android smartphones

YouTube captured 70% of the time spent on smartphones with OS Android when watching videos, the study said. App Annie Interestingly, the growth of the other four streaming applications was provided by Chinese users.

2017: Revenue growth of 36%

Revenue rose 36% to more than $11 billion. Over the year, the company attracted 24 million new subscribers - up from 19 million in 2016. In 2017, the company posted positive full-year earnings in the global business segment for the first time, Netflix said. Revenue in this segment more than doubled.

2016

Revenue growth was 35%

Netflix showed revenue growth in 2016 - by 35% - to $8.3 billion at the expense of 19 million new subscribers. 7 million of them connected to the service in the fourth quarter of the year, reports Rapid TV News. The number of platform users is 93.8 million, 49.43 million of which are in the United States. In 2016, Netflix carried out a global launch of the plaftorm, with the exception of China, and the company notes progress in this direction. However, the popularity of the service abroad remains much lower than in the United States.^[9]

Moving to the Amazon cloud and closing its own data centers

On February 11, 2016, Netflix announced the complete transfer of the video service from its own data centers to the Amazon Web Services (AWS) cloud platform. This migration took the online cinema about seven years, according to its official website.

According to Netflix, even before 2015, the company moved most of its IT systems to the public cloud, Amazon but it took longer to safely move the payment infrastructure and data management systems of customers and employees.

Yuri Izrailevsky, vice president of cloud solutions and platforms at Netflix, explained that the company has carefully optimized its technologies for working in the cloud to prevent the recurrence of "all the problems and restrictions that were in the data center."

By January 2016, the service was completely located in the cloud, and all data centers serving it were closed. Netflix reports that the decision in favor of AWS was made because this platform is scalable and has a rich set of functions and services that are necessary to serve the global user base. Thanks to the elasticity of cloud computing, the company was able to add thousands of virtual servers and petabytes of disk space in just a few minutes, Izrailevsky notes.

According to him, "it would be extremely difficult" to support new resource-demanding applications and the rapid growth of data that has to be processed. Since 2008, when Netflix began to move to the cloud space, at the beginning of 2016, the number of users of the service jumped eightfold, and the volume of content viewed also increased significantly, Izrailevsky emphasized.

He also added that with the help of migration to the cloud, Netflix was launched in 130 new countries (including Russia) in early 2016.^[10]

The Minister of Culture of the Russian Federation sees Netflix as a threat to American propaganda

Russian Culture Minister Vladimir Medinsky, expressing concern about the lack of normal funding for domestic cinema, said that Netflix is supporting the American government with might and main.

In an interview with RNS^[11] the official expressed the opinion that successful startups, like the American OTT service, cannot arise just like that.

"What did you

think - all these giant start-ups come up on their own? Sat one boy student, invented - and billions of dollars fell on top?!, " the minister emphasized

.

According to Medinsky, the American government understands that cinema is one of the most important stories, which, moreover, can be used as a tool to influence citizens, which is why the US authorities support it, including through Netflix.

"In our conditions, our ideological friends are well aware that there is the most important of the arts - how to enter every house with Netflix, get into every TV, and through this TV - into the head of every resident of the Earth," the head of the Ministry of Culture of the Russian Federation specified.

Earlier, the Ministry of Culture proposed to introduce a new fee from online cinemas and TV channels in the amount of 0.5% of revenues and another 3% from cinemas and film distributors to support the domestic film industry. Neither the industry nor government agencies supported the support of the ministry. "Unfortunately, the position of both film networks and TV channels is understandable, explainable, logical and selfish. Perhaps in their place we would behave in the same way, "Medinsky commented. Meanwhile, the Ministry of Culture, obviously, is not going to retreat from this idea and will look for alternative ways to raise funds from business in favor of domestic cinema

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STS proposes to limit Netflix in Russia

Deputy General Director of STS Media, President of the Media Communication Union Sergei Petrov proposed taking legislative measures in Russia against foreign streaming services such as American Netflix. He stated this in Kazan at a meeting of the Agency for Press and Mass Communications of Tatarstan^[12].

"I think it is quite possible that companies should have registered representative offices in Russia, become tax residents, so that the turnover of payments received from consumers passes through the Russian taxable base, and the country received an opportunity from this to strengthen domestic content," Petrov said.

In his speech, Petrov called Netflix a threat to the prospects for import substitution in Russia. According to him, Netflix infringes on the interests of Russian manufacturers, without ordering them films and TV shows.

In a commentary to Novaya Gazeta^[13] Petrov stressed that he acted precisely as president of the Media Communication Union. Among the founders of this organization are the National Media Group, STS Media and the Gazprom Media holding.

Coming to Russia, but not to Crimea

Netflix began operating Russia on January 6, 2016. Subscription to the service costs from 649 to 949 rubles per month. The company's services are not provided in Crimea due to government sanctions on the USA activities of American companies^[14]

2015: Revenue growth and profit reduction

In 2015, Netflix's revenue amounted to $6.78 billion against $5.5 billion a year earlier. Net profit more than halved to $122.6 million.

2011: "King" of internet traffic in the US

Movies and television shows streamed through the popular online rental service Netflix account for about 30% of all downloaded traffic during the most active periods in the United States. This is stated in a new report by the Canadian company Sandvine.

"Netflix can be called the consummate king of internet bandwidth in North America. Netflix has clearly managed to become an important service for many users, fundamentally changing the entire Internet market, "the authors of the report noted. To date, Netflix has about 23.6 million registered users. 800 thousand of them are in Canada, the rest are in the USA

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2009: The Secret to Success

The CEO of the Internet company Netflix, Reed Hastings, told Fortune magazine how he came up with the idea to organize a DVD-by-mail service, which today has 16 million customers. In the course of this story, Hastings mentioned 4 major secrets of the business that determined its success.

Netflix was born in 1997 when Reed received a $40 payment for Apollo 13. 'I remember it as I wasn't sure about the project back then. These were VHS times and I didn't think there was a huge market there yet, "he says.

After receiving the first payment, he began pondering the idea of how to set up a company to rent mailed films. Then he did not know about the DVD, a friend introduced him to this format, claiming that the time of the discs would come soon. "I sent myself a DVD in the mail. It was 24 long hours until the letter came back to my house and I opened it. It was a big joyful moment for me, "Reid says.

2004: Unlimited Leave Policy

Since 2004, Netflix employees have been taking as many days off as they wish. They decide for themselves when to come to work, when to take time off, how long it will take to complete tasks. And this policy did not hurt the company in the least. On the contrary, since its introduction by 2016, Netflix's market value has grown to $51 billion.

Flexibility at Netflix toward employees does not mean they are irresponsible about their jobs. They must carry out tasks at a high level and tell their leaders about how things are progressing. High performance has become so entrenched in Netflix's culture that it can be generously encouraged by any number of days off^[15].

Netflix employees have unlimited holidays because no one is following the times. Instead of scrupulously tracking who has worked and how much, managers focus on tasks and results. They concluded that by giving more freedom, they get more responsible workers. Employees are focused on solving problems and their productivity, and not on constant compliance with the code of practice.

When Netflix still had a traditional vacation distribution policy, employees turned to management with the question:

We don't calculate how much we spend working after hours. We check the mail at home, work at night and on weekends. So why should we count the time we spend on rest?

Management couldn't argue with such simple logic. Of course, it does not work for all companies. If this is a production where a person monitors the work of the conveyor, then he must be there from eight to five. And then it makes sense to pay an hour and count the weekend. But with the development of technology, many can work from anywhere and whenever. People work as long as they need to complete a task. The concept of "recycling" is erased.

1997: Start of business at the DVD box office

Initially, Netflix was engaged in the distribution of films on DVD-discs, using the model of the DVD business by mail exclusively in the United States. The user has been making his list of films he would like to see this month. At the same time, he had to make an amendment to how many films a month he could get according to his plan. The most popular plan cost $16.99 and the cheapest cost just $4.99, but a subscriber could only be eligible for 2 DVDs a month. It was impossible to get all the disks at once. To receive the next DVD, you had to mail the previous ones back.

Шаблон:Online Video

Notes