eli5 how a streaming service like Netflix acquire content?



What’s the process to acquire content? Do they pay for access for a whole series or based on the views after it’s on their platform?

In: Economics

They pay for access. It’s called licensing. They have licensing agreements with the production companies that allow them to sell content. The more popular a show/movie is expected to be, the more it costs to license it.

Netflix also produces some of its own content such as Stranger Things and Orange is the New Black.

The same way TV companies and movie theaters do. You pay the creator and receive a license to distribute the show or movie.

Usually the contracts run for a set period of time, which is why things disappear from Netflix if they don’t renew the contract and pay more money.

They pay for distribution rights from the content owner in the form of a license. Things get tricky in an international market though. Some properties are owned by different entities in different countries. This is one of the reasons why some shows are blocked for specific countries. Netflix may have gotten a license from the owner in country A, but its owned by someone else in country B and Netflix didn’t make a deal with them for whatever reason.