With millions stuck at home due to COVID-19, streaming services such as Netflix and Amazon Prime Video are facing a deluge of users. Even at the best of times, keeping a streaming service up and running is a challenging proposition—just take a look at Netflix’s engineering blog, which details the ingenuity of its developers in dealing with constant demand. And now, with traffic way up, these services’ software engineers must ensure that everything continues to run smoothly.
In light of that, how much are these software engineers earning? Fortunately, we have a number of websites that anonymously crowdsource compensation data, including levels.fyi. Here’s a breakdown of what Netflix, Disney (which runs Disney+, the company’s new streaming hub), Apple (which also recently launched a streaming service, Apple TV+), and Amazon (with Amazon Prime Video) all pay in salary, bonuses, and stock. (One big caveat here: Not all software engineers at these companies work directly on streaming-video efforts; however, it seems likely that compensation for streaming-based engineers would echo that of engineers on other projects.)
The Netflix Enigma
It’s clear, based on this, that software engineers make quite a bit in compensation. The outlier, of course, is Netflix, and it’s worth exploring why its software engineers seem to make so much more than “regular” software engineers at other companies.
Let’s start by breaking down levels.fyi’s data, which is based on 70 salaries and covers a variety of roles, from full-stack developers to API development; the tenure of individual developers also ranges greatly, from 1-2 years to 7+, despite everyone’s designation as “senior software engineer.” Only one of those self-reported salaries is below $300,000 (a full-stack developer with two years at the company, pulling down $150,000 per year).
The Netflix compensation data from levels.fyi contrasts strongly with that of Glassdoor, which is also anonymous and self-reported. Glassdoor reports (based on 174 salaries) that average base pay for a Netflix software engineer is $262,122, with additional compensation of $13,481 (four anonymous respondents to Glassdoor reported cash bonuses averaging $13,481, along with stock bonuses of $20,000).
The Glassdoor numbers align strongly with those at PayScale, which states that the median compensation for a Netflix software engineer is $247,000. Even lower is the crowdsourced data from the H-1B Salary Database, which suggests the company pays software engineers on the H-1B visa a median salary of $164,674 (which, ironically, is pretty close to what the other companies in our chart pay their software engineers); however, H-1B engineer salaries don’t necessarily align with engineering salaries as a whole.
What’s behind Netflix’s huge salaries? There are a couple of different possibilities. For starters, there’s always the theory that employees anonymously self-reporting their salaries are exaggerating the numbers, possibly to give them more leverage in an eventual negotiation for boosted compensation. Given how many of these crowdsourced salary sites have relatively small sample sizes, it would be very easy for even a few dozen employees to radically shift median compensation upwards.
However, we have to assume that these websites are also controlling for outliers and attempts to artificially spike salary data. The more benign explanation, therefore, is that Netflix actually pays its software engineers a much higher salary than the competition (although perhaps not as high as levels.fyi suggests). Indeed, Netflix likes to brag that it pays the maximum possible:
‘To help us attract and retain stunning colleagues, we pay employees at the top of their personal market. We make a good-faith estimate of the highest compensation each employee could make at peer firms, and pay them that maximum. Typically, we calibrate to market once a year. We do not think of these as “raises” and there is no raise pool to divide up. The market for talent is what it is. We avoid the model of “2% raise for adequate, 4% raise for great.” Some employees’ market value will rapidly rise (due both to their performance and to a shortage of talent in their areas) while other employees may be flat year-to-year, despite doing great work. At all times, we aim to pay all of our people at the top of their personal market.’
The Streaming Wars
There’s some good news in these numbers for software engineers. First and foremost: streaming video demands a variety of engineering skills, from backend and frontend development to mobile design, UX/UI, database operations, and much more. Whatever your particular skillset and sub-discipline, chances are good that it aligns with the needs of the various streaming companies out there. And those companies are willing to pay a generous combination of stock, salaries, and bonuses to get the right people onboard.
Second, streaming as a field is poised to expand, and not just because the COVID-19 crisis is keeping everyone inside. In addition to the companies listed above, Google (with YouTube) and other firms have their own streaming concerns. As the market expands, the need for software engineers will only increase. While some of these companies and networks will fail (especially if their shows are terrible, or they can’t provide reliable service), streaming-centric software engineers are set to win big.
For more COVID-19 content, check out the COVID-19 Jobs Resource Center.