NETFLIX REVENUE KPI TREE (FOCUS ON ACQUISITION FUNNEL)

2 min readSep 10, 2023

NETFLIX REVENUE KPI TREE (FOCUS ON ACQUISITION FUNNEL)

Problem Statement:
The revenue growth of Netflix has slowed down. While the business outcome is to grow the revenue, you are tasked with mapping it to the required product outcomes. Outline the product outcomes to drive revenue growth by focusing on the acquisition part of the funnel.

Questions:
- How the revenue is a function of the new subscriber acquisition
- Highlight the product outcomes to drive acquisition by breaking down the equation further.

Fundamental idea:
Mapping business outcome to product outcome.

KPI Tree: https://whimsical.com/revenue-growth-W8f2ujEmbWm5EUX4GVqSEB

Description:

Revenue of a subscription-based model can be defined as = #subscribers x subscription price.

# subscribers = new subscribers + existing subscribers. Since Netflix has renewed monthly, existing subscribers are renewed subscribers.

Simply put, we need to maximize the MRR from existing users, so we follow upsell and cross-sell rates and the churn rates.

For new users (via various acquisition channels (explained below)), we would be tracking the visitors (installed the app or visited the website), bounce rate (people who visited and signed up), and conversion rate (how many visitors turned into subscribers).

We can further break down acquisition channels for new users. New users' entry points can be:
1. Web
2. Mobile app
2.1 Android
2.2 iOS

Potential acquisition channels can be:
1. Referral
2. Marketing campaigns for web
3. Marketing campaigns for Android
4. Brand promotions
etc

Individual optimization can be further done for each channel. Respective conversation rates can then be tracked for each acquisition channel.

Assumptions:
Offered subscriptions and the respective price stays constant.

References:

NETFLIX REVENUE KPI TREE (FOCUS ON ACQUISITION FUNNEL)

Written by Sanya Sawlani