America’s Streaming Stack

Netflix started the online streaming revolution in 2007. This was ten years after the launch of the DVD-by-mail service in 1997. If you are not in technology, you probably aren’t familiar with the challenges with online streaming. Building scalable online media businesses can be very expensive if anything goes wrong.

For example, last November in 2024, Netflix experienced a significant failure during a live broadcast for the Mike Tyson vs. Jake Paul boxing match. This event was a pay-per-view (PPV) style sporting event, although it was included as part of a Netflix subscription. Despite heavy marketing, Netflix may have underestimated the sheer number of subscribers attempting to tune in simultaneously for this high-profile event.

You’ve probably noticed similar issues while streaming other shows. Netflix is either buffering, delivering video quality or crashes. This is what happens when tens of millions of households attempt to watch the same content simultaneously.

The problem with scaling online businesses is that it is difficult to estimate how many users are online at the same time. Video games, YouTube and other platforms have similar problems. A sudden surge in viewers can overwhelm Netflix's content delivery network (CDN). At first, I didn’t understand these bottlenecks and needed to do a deeper dive into the world of technology. That’s where I learned about websites like ByteByteGo, that give you a deeper understanding of system design for technology businesses.

Below is Netflix’s Tech Stack from the ByteByteGo newsletter. It gives us a better understanding of how moving parts exist within the Netflix platform.

Before seeing this tech stack, it was hard to comprehend how many moving parts are required to make online streaming flawless. The frontend, backend, data storage, and retrieval add so many layers of complexity. Just tweaking the frontend has so many elements that need to work together to build a smooth user experience.

Netflix's Q1 2025 Earnings Review

I started with the tech stack so investors would understand the technical complexities required to build a competitive advantage. In Q1, Netflix delivered a 12% year-over-year revenue growth. This is a massive number for any business that now delivers $10.5 billion in quarterly revenue. Netflix is projected to hit $11 billion in revenue this upcoming quarter.

However, the number I track most closely is subscriber growth. Paid memberships are the lifeblood of Netflix and many online businesses. Now Netflix stopped reporting quarterly subscriber numbers this quarter, but did say that retention is stable. To get a deeper understanding of revenue & membership, I used FinChat charting tool to view Netflix’s Segment KPIs. Both numbers are moving up and to the right.

Netflix added 41 million subscribers globally in 2024. In Q4 2024 alone, they added a record 18.9 million new users, reaching a total of 301.6 million subscribers by 2025.

What’s most impressive to me is how Netflix has been able to monetize new subscriber growth. Even during an economic slowdown, the streaming revenue has become quite resilient. Watching movies at home for as low as $7.99 is a cheaper form of entertainment than going out.

Overall, these are promising numbers and I continue to be impressed by Netflix’s delivery. For years, this business model was losing a significant amount of money, investing across its infrastructure, content studio and more. I thought the online streaming business would become commoditized and consumers wouldn’t want multiple subscriptions. However, I was wrong and very off on guidance. Netflix has proven to deliver an exceptional business that is now compounding returns over the long run. At the current rate, I think they are on track to achieve 1 billion paid subscribers while building a wider menu of streaming options for everybody.