Charles Abuede
Employees at American streaming giant, Netflix, led those of other tech big names, Apple, Facebook, Alphabet and eBay in revenue generated per head, as they averaged $2,343,773 in the 2019 financial year, according to data accessed by Business A.M.
The data gathered and released during the second quarter of 2020 by BuyShares revealed that the tech startup, which boasts of over 192 million paying subscribers, tops the chart in the tech category, and it is followed by Apple employees who generated $1,899,051 per head.
The data also show that among the analysed tech companies, the social media giant, Facebook, came third with $1,573,072, followed by Alphabet, the parent company to search engine giant, Google, whose employees each generated $1,361,298 in revenue. Fifth on the log was online retail platform, eBay with $812,030, which was followed by PayPal with $766,034; Twitter, $705,986. Chinese based Alibaba Group employees generated $612,117 on the average, and Amazon closed the category for the analysed tech companies with each of its employees generating $351,531.
Overview of Netflix paying subscriber base growth
The information in the data shows that the revenue growth at Netflix was attributed to its steadily growing user base, with the 2019 financial showing that the number of Netflix paying streaming subscribers grew by 797.42 per cent globally between the third quarter of 2011 and the second quarter of 2020.
While the streaming giant could boast of 21.5 million paying subscribers at the close of the third quarter of 2011, by the end of June 2020, the company’s numbers had risen astronomically to 192.95 million.
A further examination of the data shows that Netflix added about 10.09 million new paying subscribers during Q1 2020. The 192.95 million represent 85.49 per cent increase from 104.02 million recorded during Q3 2017; and global paying subscribers hit the over 100 million mark for the first time during Q3 2017.
Netflix is adding new subscribers at an astronomical rate despite growing competition.
The pandemic appears to have come as a blessing in this case with Netflix among companies that have benefitted from the coronavirus pandemic, where it kept millions of people who focused on streaming to pass time at home. Remarkably, pandemic growth should be noticed with care bearing in mind that the company was relishing an organic growth in the number of paid subscribers pre-pandemic.
Furthermore, Netflix, unlike its competitors, enjoys a big streamer base since it is available globally. Disney is among Netflix’s major competitors but available in only selected countries. If it was accessible globally, Netflix’s paying subscribers chart would be different. Additionally, with a focus on customer experience, Netflix has continued to dwarf competitors in the industry, the report stated.
The expert opinion on the future of Netflix
According to experts in the industry, “the future growth of Netflix might be an interesting subject since the company is spending more on content, something that might directly translate into new subscribers. It leaves the option of spending more to market content. Although Netflix has begun spending more on original content, the reliance on licensed content might not be profitable in the long run. Some of the licensed content appears to perform better than original content. Netflix, however, does not release its viewing data.”
Major talking points to consider from the released 2019 financials of tech companies
- Generally, revenue per employee is less in the industries which are labour demanding but high in tech companies with low labour concentration like Netflix. Although, most enterprises aspire to generate high revenue per employee by maximizing on factors like hiring policy.
- Employee turnover requires a company to interview, recruit, and nurture new workers to make a profit for the company. Notwithstanding, revenue per employee is usually impacted by the company’s turnover rate. For Netflix, its hiring mechanism is the best for the tech industry considering the huge amount generated.
- Furthermore, the age of a company also determines the revenue per employee rate. Young companies that are hiring to fill key positions might still have relatively small revenue. Such firms have a lower revenue-per-employee ratio than more established companies
