(Most people have trouble wrapping their heads around just how huge consumer markets are. If you have 300M users - a la Whatsapp when Facebook acquired them - and charge them just $1/year, that's $300M/year in revenue, or enough to afford 1000 $300K/year engineers [or actually more like 1000 $200K/year engineers once you figure in overhead]. Similarly, if just one person out of every 100 acquaintances you know uses a product but they spend $10/month on it, that's about $400M/year. The challenge for consumer businesses is usually that they have to spend more to reach those customers and get them to open up their wallets than they make from each one, not that there aren't enough customers.)
Of course out of those $12bn, 7-8 will go to cost-of-goods-sold (buying or making the content they serve up). Still, 3-4bn of gross income pays for quite a few engineers.
$2.98 billion sales, $991m gross profit, $208m operating income
Tracking toward $11.75b - $12b in sales for fiscal 2017, with a mere ~3,400 employees or so.
They've historically had relatively slim margins (especially in the streaming business), probably explains the very thin employee base versus the sales.
I think you're massively underestimating overhead. Each person who works on a product should make a max of 15-25% of what they bring in. If you have a repair shop and you charge $100/h, you should be paying your techs $15-25.
$1 billion a month is about $1.4 million an hour 24/7.
$300,000 + ~$50,000 in benefits / 260 working days yearly / 8 hour work days is about $170 an hour.
That works out to earning about 0.012% of what they bring in.
Netflix is a bad example because, like most media companies, the vast majority of their expenses go towards media licensing and production. So while it's easy to paint their engineers as overpaid compared to the labor market, it's very difficult to paint their engineers as overpaid relative to their product.
Netflix has other perks of course. But they also have a pretty crazy layoff policy and they brag about how awesome their severance package is.
Employment as Netflix is really a mixture of the income premium and lack of stability that a contractor would have, with a compensation structure closer to a startup (base salary only, no formalized bonuses).
Note, ever since IC Engineers started getting significant bonus/stock grants (Which, I think, is something that has been a thing for less than a decade, at least for grants of publicly traded stock.) From what I've seen? Contractors have lost their income premium.
I mean, contractors still make more than what they'd make full time for base salary, but base salary is now a relatively small portion of total comp for FTEs at most places.
Just my observation; I'm also talking about the sort of contractors who go through body shops and essentially do the same jobs as the regular employees.
When you look at that world, contractors still win by a very wide margin: They are organizations where HR will not allow a hire for a competitive salary, but a department head can spend their budget on contractors any way they want. This leads to gigantic pro-contractor differences: As recently as last year, I made three times as much as someone sitting next to me that had Architect in their title, and the contract was for many hundreds of hours, so it's not as if there was non-billable overhead.
Now, the big tech companies can compete with contractor billing rates, just as long as it's either Netflix, or someone with good-as-money stock grants, but if you live in, say, Kansas City, you won't smell those companies anyway, and chances are that, barring remote work for a giant, the best you can hope for without contracting is salary that isa little bit below Google's, but no stock.
Those jobs with the as good as money stock grants are interesting because they represent the top of the market not just locally, but globally. If you want to maximize income in this industry and you are not good enough to move markets to you, you move to silicon valley and interview.
EDIT: Sorry, I misunderstood something. Netflix has indeed been making a profit.
A company with a positive cashflow and GAAP profitable is in the best spot, followed by a company with a positive cashflow and losing money in GAAP-land, followed by a negative cashflow and positive GAAP-land, followed by a negative cashflow and negative GAAP.
Content should be amortized as it will generate revenue for years. It's essentially being treated as a capital expense, which isn't unreasonable.
Intuitionistically, it makes total sense that you get a clearer picture of the true state of the finances of Netflix as a going concern if they recognize the costs of a show on their balance sheet over five years when they expect subscribers to still be watching it for the first (or second, or third) time several years on.