How Streaming Companies Calculate Profit from Series and Films
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How Streaming Companies Calculate Profit from Series and Films

Information on exactly how profit is calculated from series and films in streaming companies is not publicly available. The Strima Association, which represents sector companies in Brazil, informed the publication Super that it does not disclose details of the calculation methodology, as each company uses its own approach.

The streaming business model differs from traditional cinema and television broadcasting. When a studio releases a film in cinemas, revenue comes from box office receipts, and then from digital rentals and sales of screening rights (for streaming services, TV channels, airlines). It is considered that investments have paid off if the film generates two to three times more than its budget. In addition to production costs, studios must account for marketing expenses, as well as the percentage of the ticket price retained by cinemas and distributors.

In the case of television, money is generated through advertising, subscriptions (for cable TV), and the sale of content to other broadcasters. During prime time, when series with the largest audience are shown, the cost of an advertisement is higher.

Although some streaming platforms have started implementing advertising in recent years, most of the revenue still comes from subscriptions. Therefore, the creation of an attractive catalog for customers is more important than the individual success of one production.

However, a hit like 'Stranger Things' attracts significantly more subscribers than an obscure series. This raises the question: how to measure its contribution to the platform's revenue? Most data on streaming service audiences is confidential. Netflix, being the market leader, publishes such information most openly. The company releases semi-annual reports (which will become annual starting in 2027) on productions that have garnered at least 100 thousand views.

The number of views is determined by dividing the total hours of viewing by the duration of the film or series. For example, in the report for January-June 2026, the fifth season of 'Stranger Things', released in 2025 and lasting 10 hours and 24 minutes, accumulated 578.4 million viewing hours. Thus, 55.6 million views were registered in the first half of this year.

Nevertheless, these figures do not allow one to understand what net profit the Netflix series itself brought. To do this, one must consider the full company efficiency assessment methodology, which remains secret. Nevertheless, there are some clues. In 2021, a Bloomberg report gained access to internal Netflix documents and discovered a metric called AVS (adjusted view share), which assesses not only the absolute number of views but also their quality. New customers or those who use streaming less frequently are considered more valuable because it indicates that certain programs motivate them not to cancel their subscription.

For instance, the first season of 'Squid Game' reached an AVS of 353—which, according to the document, brought the company an amount 42 times greater than its budget ($21.4 million compared to $900 million). The report states: 'An AVS above 9 or 10 is already considered high.' However, it is unknown what specific data is taken into account in such a calculation. AVS continues to be used as an internal metric at Netflix, and each streaming service has its own way of assessing the return on a production.

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Top 5 Fashion Influencers of Gen Z in India Earn Millions from Short Videos
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Top 5 Fashion Influencers of Gen Z in India Earn Millions from Short Videos

In the era of smartphones and fast internet, fashion is no longer limited to runways or Bollywood. Indian Gen Z fashion and beauty influencers are earning millions of rupees monthly by creating short videos, lasting 15–30 seconds, on Instagram and YouTube. What was once considered just a hobby has now entered the ranks of the country's fastest-growing industries.

The leaders among the five top Gen Z beauty and fashion influencers can charge from 2 to 7 lakh rupees for a single branded advertisement. Their income is not limited only to these videos.

When it comes to Gen Z fashion, Komal Pandey is often mentioned. She is known for her bold, original, and high-fashion videos. Her main source of income is sponsorship and advertising from brands. For collaborations with luxury and premium fashion brands, she charges from 4 to 6 lakh rupees per video. Additionally, her earnings are increased by income from YouTube AdSense and fashion partnerships.

Kritika Khurana is popular among both Gen Z and millennials because she popularizes Indo-Western and boho looks. She promotes not only fashion but also her personal lifestyle and cosmetic products. Thanks to long-term contracts with beauty brands and one Instagram reel, she can earn from 3 to 5 lakh rupees.

Roshni Bhatia has a wide audience in the classic and modern streetwear segments. Her influence extends to both Tier-1 and Tier-2 audiences. This is why major online shopping platforms like Myntra, Ajio, and Nike constantly collaborate with her. For conducting a branded campaign or video, Roshni charges from 2.5 to 4.5 lakh rupees.

Sakshi Shivdasani is loved by Gen Z youth for her unique style and funny beauty videos. She shares makeup tips and shows ways to dress on a limited budget. This attracts brands of skincare and personal hygiene products. Sakshi charges approximately 2 to 3.5 lakh rupees per video.

Anam Darbar's popularity among the Gen Z audience is due to her trendy outfits and energetic style. Her videos combine fashion and beauty with content aimed at youth. Therefore, brands targeting young consumers prefer to work with her. For a sponsored post or video, Anam charges from 1.5 to 3 lakh rupees.

Main Sources of Income

There are three main ways to earn income. Firstly, brand sponsorships and advertisements account for 70% of these influencers' earnings. Brands pay a large sum to these content creators to promote new products.

Secondly, there is commission from affiliate links. If a user purchases clothing or cosmetics via a link placed in the bio or story, the influencer receives a commission of 5% to 15%.

Thirdly, there is their own brand and masterclasses. Many content creators start launching their own lines of clothing, jewelry, or cosmetics, allowing them to receive passive income reaching millions.

Thus, Komal Pandey, Kritika Khurana, Roshni Bhatia, Sakshi Shivdasani, and Anam Darbar earn income from branded videos, long-term YouTube AdSense contracts, fashion partnerships, affiliate program commissions, as well as from their own brands and masterclasses. Creating photos or videos in clothes has transformed from a simple hobby into a multi-million dollar business.

Netflix registers R$ 19.8 billion profit in the quarter, but points to audience retention challenges
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olhardigital.com.br

Netflix registers R$ 19.8 billion profit in the quarter, but points to audience retention challenges

Netflix achieved a net profit of US$ 3.66 billion, corresponding to approximately R$ 19.8 billion, in the third quarter of 2026. This figure represents a 43.9% increase compared to the same period last year. Concurrently, the streaming platform's revenue grew to US$ 12.87 billion, equivalent to about R$ 69.5 billion, marking an annual increase of 11.8%.

Despite these positive financial results, the company faces obstacles in boosting its audience growth, notably in the United States and Canada markets. Recognizing this difficulty, coupled with a less optimistic projection for the next quarter and a decrease in expected advertising revenue, put pressure on the company's shares, which dropped more than 5% after trading closed on Tuesday (20).

The revenue growth recorded in the third quarter was the lowest in almost three years. In a communication directed at investors, Netflix admitted market apprehension regarding the evolution of viewing time on the platform, specifically in North America. The company stated in the document: 'We know there is some investor concern about the growth of our viewing hours.'

Ted Sarandos, Netflix Co-CEO, confirmed that the organization needs to improve its performance in the American market, although he dismissed the idea of a radical change in strategy. During the earnings call, he stated: 'There is no need for a fundamental change in strategy. We need better execution in the United States.'

Operating profit grows by 37%

In addition to the increase in net profit, Netflix registered a 37.3% growth in operating profit, reaching US$ 4.46 billion (approximately R$ 24.1 billion). The operating margin rose from 28.2% in the third quarter of 2025 to 34.6% in the current quarter. The company attributed this performance mainly to the increase in subscription revenue, price adjustments, and the expansion of advertising, in addition to gains from favorable currency variations. Part of the margin improvement was also credited to expense planning, which was below expectations during the period.

Free cash flow reached US$ 2.88 billion (about R$ 15.6 billion), surpassing the US$ 2.66 billion (about R$ 14.4 billion) recorded a year earlier. For the year 2026, Netflix projected revenue of US$ 51.1 billion (equivalent to about R$ 276 billion), representing an annual growth of 13%. The operating margin target for the year was set at 31.5%. However, the outlook for the fourth quarter signals a continuation of the slowdown, with expected revenue of US$ 13.44 billion (about R$ 72.6 billion), corresponding to an annual growth of approximately 11.5%.

Advertising revenue falls below expectations

Netflix also revised down its forecast for advertising revenue for 2026. The company now estimates earning about US$ 2.7 billion (approximately R$ 14.6 billion) from ads, compared to the previous estimate of US$ 3 billion (about R$ 16.2 billion). According to the company, this adjustment is due to slightly higher than expected delays in implementing certain advertising features and products.

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The revision of the advertising forecast represents a challenge for one of the business expansion areas. Netflix is seeking to increase the monetization of its ad-supported plan through new tools, expanding the advertiser base, and improving advertising technology.

Even with the forecast cut, the company reiterated that it plans to continue expanding advertising revenue in the coming years. The strategy includes increasing both the number of subscribers to the ad-supported plan and the ability to generate more revenue per user.

Netflix admits need for new hits

The concern regarding audience growth is intrinsically linked to the difficulty in sustaining a sequence of major hits. Although the platform has globally reaching productions, it faces the challenge of finding new phenomena capable of engaging the audience, replacing titles like Stranger Things and Round 6.

According to metrics released by Netflix itself, recent seasons of productions such as Treta, The Night Agent, and Avatar: The Last Airbender showed notable drops in viewership compared to their previous seasons. In the film segment, no summer American release managed to stand out as a major success comparable to last year's hits, such as K-pop Warriors and Home Alone 2. The company's main title for the quarter, The Last House, accumulated 91 million views but received negative reviews from both the press and the public.

Competition also puts pressure on the time users spend on the platform. Free services and social media, such as YouTube and TikTok, compete for viewers' attention, while Netflix tries to keep its content among the top entertainment options. Jesse Cohen, senior analyst at Investing.com, told The New York Times that the company faces an engagement problem and needs new hits to regain growth momentum.

Executives defend current strategy

Despite the identified difficulties, Netflix leaders maintained that the company's core strategy remains unchanged. Co-CEO Greg Peters assured that subscriber retention remains healthy in all regions and that the cancellation rate improved year-over-year, both globally and in the United States. Peters also highlighted positive results in international markets, citing India, South Korea, and Japan, where local productions continue to contribute to engagement, subscriber growth, and company revenue.

The company's intention is to maintain focus on series, films, and live events while expanding the offering of third-party licensed content. Planned initiatives include new seasons of well-known works, film releases, and sports broadcasts. However, the performance in the American market will remain under intense scrutiny. Netflix believes this region has potential for faster growth and expects to improve its ability to create content that attracts large audiences and has international resonance.

This pressure on results occurs within a context of internal restructuring. The previous week, the company announced the layoff of about a thousand employees, corresponding to approximately 6% of its workforce, and promoted Peter Rice, a former executive from Disney and Fox, to replace Bela Bajaria in content leadership. Dan Lin, head of the film division, also left the organization. These changes aim to improve execution and optimize content investment. For investors, however, the challenge goes beyond just cost control: Netflix needs to convert its production spending into greater audience, retention, and sustainable revenue growth.

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