Luna Park, games and bloggers: how Netflix is expanding its business beyond online movie theater

Streaming service Netflix plans to open two theme parks - in Philadelphia and Texas - by the end of the year, and another in Las Vegas in 2027. The company is investing heavily in gaming and sports streaming and calls the TV show market "an obvious growth point." The all-around expansion in entertainment is making the online movie theater more and more like Disney. Journalist Roman Mighty broke down for Onivest whether this strategy can bring the company growth to its planned trillion-dollar capitalization.

In 2025, online movie theater Netflix stopped reporting one of its main metrics - the number of subscribers - on a quarterly basis. Announcing the change on a call with investors, the company's management urged them to focus on revenue and operating profit, rather than customer growth, when evaluating its business.

"We want to focus on what we believe are the key metrics of our business," said co-founder Gregory Peters. He attributed the decision to "refining our revenue model," introducing different subscription pricing tiers and diversifying revenue sources not directly related to the number of subscribers.

Analysts suspected that dropping the metric would displease investors and make it difficult to predict the company's future business. The fears proved futile: Since April 2024, when the change in the statistic was announced, the company's stock price has risen from $555 to $1200 as of mid-August, and the company's capitalization has surpassed $500 billion. In 2025, the company expects to earn between $44.8 billion and $45.2 billion in revenue - a 15% increase from 2024. The new goal is a $1 trillion capitalization by 2030, says platform co-CEO Ted Sarandos. How is the company going to achieve that?

Netflix's global subscriber base reached 301.6 million at the end of 2024, the company said in its quarterly report, of which 30% were in the U.S. and Canada. The latter brought the company nearly 45% of its revenue. However, the US market is saturated, making growth difficult: 95% of users already have at least one streaming account. Against this background, it is becoming more important for online movie theaters to retain users, Kantar's research said, including through content diversity.

Prime Video, Peacock, and Max began offering users sports broadcasts and news. Netflix offered US subscribers only one-off matches or fights, signing up only one near-sports league - American wrestling WWE - by the beginning of 2025. Since the beginning of the year, wrestling broadcasts have ranked in the top 10 most popular English-language content on the service for six consecutive months.

Now Netflix is trying to strike a deal with MLB (the major professional baseball league in the United States). The company has been studying the possibility of a deal with the NBA basketball league and has been negotiating the broadcast of the US Open. The online movie theater has become one of the contenders for the rights to broadcast UFC matches, the new offer of the American soccer league NFL may be aimed at distribution through the service - Netflix has already shown two games on Christmas Day 2024 and plans to broadcast two matches on Christmas Day 2025.

Netflix has been among the laggards in the sports market, Bloomberg notes. The company declined to discuss sports broadcasts in detail on an investor call in April, and Sarandos said in July that the company's live streaming strategy extends "beyond sports" and the U.S. market.

"Our biggest opportunity is to win 80% of the TV viewing time that is not owned by us or YouTube," Netfix co-CEO Greg Peters spoke of. To cooperate with youtubers Netflix began in 2016, in the online theater for two seasons was the series Haters Back Off with Colleen Ballinger, known on the Internet as "Miranda Sings", the reasons for the closure was not officially reported, the market assumed: that the streaming service did not suit the ratio of cost - number of views. Nevertheless, the company is not abandoning its strategy of cooperation with popular bloggers. To attract children's audience, the service signed a contract with a former kindergarten teacher - Miss Rachel has 16.3 million subscribers on YouTube, and the video, filmed three years ago, was viewed by 1.5 billion users.

Her latest video on YT gained 60 million views in 2 months, on Netflix everything is much more modest - all products from Ms. Rachel watched 53 million times in 6 months. But the company considers it a success.

Sarandos states that YouTube is a place where video bloggers make content at their own risk because the service doesn't give them money to produce. Netflix is willing to do that. In April, the theater began streaming live episodes of the YT-launched reality show Pop the Baloon; in March, the second season of the popular British YouTube show Inside was launched on the streaming service, and a U.S. version has also been announced.

The shows are still gaining less on the new, pay-per-view platform than on the old one. On Youtube, Inside's most unsuccessful single episode has garnered 5.7 million views. The first three months of the second season on Softlix garnered an average of 2.4 million each, Deadline writes. Pop the Balloon also saw a roughly halved number of viewers.

In 2021, Netflix began offering games to users - by 2025, the company will spend up to $2 billion on them, Forbes magazine estimated. Now the service offers subscribers more than 140 games that are not monetized through microtransactions or advertising. Although mobile games brought the company a daily audience of more than one million people by spring 2025, their total revenue is in the millions, if not hundreds of thousands of dollars, according to statistics from the Appmagic service. On mobile devices, they increased user engagement by only half a percent, Omdia calculated, but the movie theater says it's aiming for a different audience.

The company plans to focus on developing more games available on the Netflix app on smart TVs, which already account for 70% of its viewing. Some of them are supposed to be party games, some are supposed to be projects for young children. The mobile market has expanded the gaming audience from 300 million to 3 billion people, says Alex Taskan, head of gaming at the streaming service, in an interview with The Game Business. He believes that games inside TVs can expand that market further.

"Look at the new generation: are eight- and ten-year-olds dreaming of a new PlayStation? - Tuskan asks. - 'I'm not sure about that. They want to interact with any digital screen, whatever it is, wherever it is, even in the car."

At the Game Developers Conference in San Francisco in March, he acknowledged that Netflix is not yet "Netflix for games" - meaning subscription game services. But the company, he said, is looking to replicate its success in the new market as well. It sees it as a way to keep audiences between seasons of popular shows.

"Such synergy seems good," Unlock Partners partner Alexandra Pestretsova told Oninvest. - The audience of games and TV series overlap a lot. Through the development of the gaming component, Netflix will be able to bring a new gaming audience to the platform and raise the lifetime on the platform for the old one."

Pestretsova notes that in the gaming market, a significant share of revenue is generated by games on well-known IPs (author's entertainment universes, such as movie franchises), and this part of the market continues to grow. "Netflix will be extremely comfortable operating IP licenses for games," she says, "and audiences will get all the content on one platform at once on one IP, which is good from a marketing and cross-promo perspective. The top ten most downloaded mobile games of the service include games based on the TV series "Squid Game" and the reality show "Temptation Trial".

Commenting on the lack of direct monetization of existing games, the expert notes that now it may be more important for the platform to build up the audience, consolidate it with the series and check its relevance to its main content.

In a July letter to investors, Netflix said it has completed the rollout of its proprietary Netflix Ads Suite advertising platform across all advertising markets. The company offers advertisers advanced analytics, targeting and automated ad placement (programmatic), saying it can deliver "innovative ad formats."

The vast majority of deals with major agencies for 2025 are already in place, the company said. It calls its goal to "roughly double advertising revenue" from last year. No specific target is named; in 2022, Morgan Stanley predicted that movie theater ad revenue could reach $3 billion in 2026. Competing service Prime Video uses some of its ad slots to promote other Amazon products - by the end of the year, Netflix could potentially use the experience to promote its theme parks.

The streaming service plans to open its first Netflix House theme parks in late 2025 - in the King of Prussia Mall near Philadelphia and Galleria Dallas in Texas. A third site will join them a year later, in Las Vegas.

Each location will offer fans of Netflix series regularly updated "new experiences and programs," spokeswoman Sabrina Phillips Oliver said. In Philadelphia, it will build rides based on the Wednesday series "Wednesday" and the manga "One Piece," a virtual reality area, minigolf and a movie theater to show the series. In Dallas, there are rides based on Stranger Things and Squid Game, as well as a Netflix RePLAY gaming zone with immersive rooms and retro games.

Attractions will also be dedicated to the online movie theater's other series, and Netflix Bites restaurants and stores with series merch will open at the venues.

The offline expansion and other marketing activities remind investors of Disney's business, but for a new generation, notes Investors Daily Business. There is a successful example of this strategy in Disney's most traditional business, family animation.

KPop's Demon Hunters has become Netflix's most watched animated movie ever. The story of a K-pop band saving the world from demons has garnered more than 184 million views and its soundtrack has topped the charts. The promotion utilized K-pop industry strategies - viral videos, user-generated content and a deep connection with fans, CNBC says. Netflix b, scheduled shows with karaoke, releasing 187 merchandise products - more than the third season of "The Squid Game." The movie may even get a theatrical version. That's also a strategy for Disney, which has been working with the theater for 32 years.

There is a danger in this diversification of business for Netflix - the growth of costs and the number of projects with a low return on investment by the standards of the Internet industry. So far, Netflix seems to many on the market as a focused business with good growth positions and capitalization of $517 billion. The capitalization of Disney, which celebrated its centennial last year, is only $202 billion.

This article was AI-translated and verified by a human editor