In 2025, Netfilx is planning to open two concept stores the movie and TV streaming company is calling Netflix House.

Netflix has yet to make a formal announcement and release many details, but vice president of consumer products Josh Simon says it will open physical stores with merchandise and activities inspired by its content.

Netflix House will debut in two undetermined cities in the U.S. before expanding globally, Simon told Bloomberg. Here are three key reasons Netflix is getting physical.

1. Keeping up with the competition

• Entertainment consumers will pay for a digital and live event experience.
• Netflix can sell merchandise and live events related to its content.
• Netflix House will include a combination of merchandise sales such as clothing, food service and dining, and live events.
• Netflix plans to build Netflix House into a global brand.

Key takeaway: Big streaming competitors such as Disney and Universal already have theme parks and theme-related live events.

2. Netflix needs new ways to generate revenue:

• Revenue in the fiscal second quarter ended June 30 was flat at $8.187 billion compared with $8.161 billion in Q2 2022.
• Net income was $1.487 billion compared with $1.305 billion in the previous year.
• “While we’ve made steady progress this year, we have more work to do to reaccelerate our growth,” Netflix says.

Key takeaway: Netflix must diversify to grow revenue, and developing Netflix House is now a top strategic priority.

3. Netflix has a global base to make Netflix House a considerable success.

• Netflix has 238 million paid memberships in over 190 countries.
• There are 75.5 million paying members in North America and 79.9 million in Europe, the Middle East, and Africa.

Key takeaway: Give Netflix members what they want: more interaction.

“By opening physical stores, Netflix aims to create a more tangible connection with its fans,” Simon tells Bloomberg. “While streaming services have revolutionized the way we consume entertainment, the company recognizes the value of providing a physical space where fans can gather, interact and share their love for their favorite shows.”

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