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Netflix sells monthly subscriptions to movies and TV shows that people stream over the internet.
Netflix is a subscription streaming service. For a monthly fee, you get a library of movies, TV series, and documentaries you can watch on your phone, laptop, or TV whenever you want, without ads. The company began in 1997 mailing DVDs in red envelopes, then bet the whole business on streaming in 2007, and later on making its own shows. Today it operates in more than 190 countries and is the largest paid streaming service in the world by subscribers.
The money model is simple. Customers pay Netflix directly, month after month, and Netflix spends a big chunk of that cash buying and making shows. The famous shift was into original content — "House of Cards" in 2013 proved a streaming service could make hits itself. Originals matter because Netflix owns them forever, they can't be pulled by a rival studio, and they travel across borders. Big swings like "Stranger Things" and "Squid Game" draw new subscribers and keep existing ones from canceling, which is the real engine of the business. Netflix's great strength is scale: it can spend roughly $17 billion a year on content in recent years, far more than most rivals, and spread that cost across hundreds of millions of subscribers. Its great vulnerability is that streaming is a brutal, crowded fight. Disney, Amazon, Warner Bros. Discovery, and others all chase the same eyeballs, and viewers cancel easily when the catalog gets thin. That is why Netflix added a cheaper ad-supported plan and a paid option to share accounts outside your household — both turned former free riders and price-sensitive viewers into revenue.
The company generates real free cash flow and mostly plows it back into content rather than paying a dividend. It has bought back stock in recent years, a sign management thinks its own shares are a good use of cash. A useful fact about its ambition: Netflix co-founder Reed Hastings once said the company's biggest competitor isn't another streamer but sleep — there are only so many hours people can watch. That framing explains why Netflix fights so hard for attention and why it keeps experimenting with games and live events to fill more of that time.
Saved answer · last researched 21 Oct 2026