Blog Post

paidContent 50: The world’s most successful digital media companies

19. Netflix

Video, United States (Public)

Last year’s rank: #5

Digital Content Revenue

$2,013,480,000 (62% of total)

Digital Snapshot

“The smart TV revolution is just beginning,” Netflix CEO Reed Hastings told paidContent a few months back. For Netflix, DVD rentals peaked in 2010, while streaming hit two billion hours in Q4 2011. Netflix is now one of the world’s leading multi-device subscription-entertainment access brands. And it remains a frenemy to its studio suppliers.  The network Starz pulled its 1,000 movie sand TV shows from the service last year over a pricing dispute, and, seeing the writing on the wall, Netflix is aiming to build up its own original programming.

Key Move

Too much, too soon? In an effort to maximize the streaming business, where Netflix is growing fastest, Hastings split his company in two — one for streaming only, the other (Qwikster) just for ye olde DVDs. Many users balked at the separation, and a contrite Hastings reversed himself on the separate branding, but retained the Chinese wall. The revolt mauled Netflix’s share price, and international investment threatened to push the company into the red.

Our Methodology

Netflix gets revenue both from DVDs and online streaming. Working out is based on Netflix domestic and international streaming (but not DVD) subscriber counts for each quarter in 2011. But it only began stating customers in this way in Q3 2011. Domestic streaming subscribers were 21.4 million in Q3 and 21.7 million in Q4. Piper Jaffray analyst Mike Olson tells paidContent he estimates Q2 domestic streaming subscribers at 19 million and Q1 at 18 million. That makes for 80.1 million domestic streaming subscribers in 2011. International streaming subscribers are disclosed by Netflix at 800,000 for Q1 2011, 970,000 million for Q2, 1.48 million for Q3 and 1.86 for Q4. That is 5.11 million overseas streaming subscribers. That made for total global streaming subscribers of 18.8 million in Q1, 19.97 million in Q2, 22.88 million in Q3 and 23.56 million in Q4. We take a median of 21 million streaming customers through the year, each paying $7.99 per month for 12 months, making a total of $2,013,480,000 in 2011 streaming revenue.

Source: SEC: 2011 Annual Return

— RA

21 Responses to “paidContent 50: The world’s most successful digital media companies”

  1. Good Job Mr. Robert

    I am a freelancing SEO and SMM professional. The recent update of google penguin and panda has changed the SEO pattern radically.

    And google has done this algorithm change to spread their digital ads business nothing than this.

    I really hate this because, making loss to others for their own profit is a Digital Crime and Weak Business policy from my view. Check my site Arsenal Highlights

  2. ciaranj

    If you want to rank things on revenue, fine. But then don’t call it the ‘Most Succesful List’: Microsoft might ‘make’ $3.9b on digital content, but it also loses around $3b every year too.

  3. Abdallah Al-Hakim

    I think this is a terrific list despite any reservations some people have about the methodology. It really demonstrates the huge growth potential of digital media companies in some of the emerging markets. Also, as a scientist – I note Elsevier being top 5 in revenue (Elsevier is publisher behind many of the top scientific journals).

  4. Mindbendingpuzzles

    What about Valve and their digital games platform: Steam. I know they are a private company and figures are hard to come by but in 2011 Forbes reckoned they have more than 50% of the 4 billion dollar PC games download market. That is huge.

    I would really love to see Paid Content do some investigation on Valve because they are an incredibly innovative company who really push digital retailing to its limits.

  5. Groupon and Monster are’t really media companies. I’m not even sure that ad agencies should qualify in the same category as Viacom or Time Warner. Totally different business model.

  6. Brendan

    Why is eBay not in this list? They have an ad business on eBay.com and their classified sites, and the seller fees they collect are essentially paid ads since the platform doesn’t handle the items. This list is also missing Alibaba Group from China (including Taobao), and Gree from Japan.

  7. Zato Gibson

    “Creating this list wasn’t easy.”

    I can imagine. Manipulating the numbers to get Microsoft into the top 10 must have been really tough.