Originally Posted by _GTech
I doubt they spent more than 5 Million on their Server & Staff this year, surely...
It's the CEO who walks away with the most, remember that...
Totally, CEO probably = 90% of the salaries paid out.
But to think about it--at least, if it were in california--that mid-level software engineers what work on better encoding for lower total data required, etc., probably get at least 100k per year--that's only 50 people to hit 5 million operating costs, not even including hardware (I'll admit that not all workers for netflix are high-paid software engineers, but on the other hand, I'm sure netflix has much more than 50 workers. Even if the average salary of workers there was 50k per year, that's only 100 employees). But in addition to hardware, there's bandwidth they are buying from providers, lots of raw utilities, monthly costs of the physical work locations--I didn't appreciate how much it all adds up. To illustrate, the company I work for, which has about 20 scientists (previous start-up biotech in silicon valley, so costs are a bit more inflated than the rest of the country), has a minimum operating cost per year of 5m between paying workers, buying raw materials (we don't spend a whole lot on raw materials though), and paying for utilities. I'd be shocked if Netflix had a 5m yearly operating cost, even excluding the higher-paid managerial positions.
Netflix also spends hundreds of millions of dollars per quarter acquiring streaming media licenses--and I think they recently signed a $1billion deal for streaming media rights for 5 years of rights with one company.
Netflix is a strong company at the moment, but the average for the past year is about $105 million per quarter of net cash (that's after all expenses, stock dividends, etc.). I guess my initial assessment of "years" to recoup a $100million acquisition was off (since it would only take a couple of quarters), but keep in mind that netflix has rarely spent that much money on a single acquisition.
It is a good point that netflix can then license what they're acquiring in the purchase deal.