So I just watched the new Prey movie. It was great really enjoyed it. It came to streaming directly (Hulu for US), no theaters , no ticket prices, heck you didn’t even have to pay any money to rent it or buy it.
My question is, how does it make any movie if I didn’t have to pay any money to watch it.
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You are paying these services for content. They compete with each other to provide the most compelling content, even more so now as people are reducing their discretionary spending. In order to compete for your dollars with other streamers, they need unique and compelling content that makes you chose them. In a way they don’t make money on the movies, they make them in order to attract and retain subscribers by offering them stuff they can’t get elsewhere.
One thing I didnt seem to see mentioned in any of the top comments is product placement.
Billion dollar companies will pay big money for movies to passively promote their product.
For example the main character could have wireless apple airpods and a reoccurring skit throughout the movie could be the character trying to get their grandma to understand that they are listening to music wireless… we dont realise how many movies contain this type of marketing.
It can generally work one of two ways:
* Someone can make a movie that they maybe want/hope to be in theaters, but no one wants to buy it and put it in theaters (marketing movies and putting them in theaters is what “distributors” do, if you ever hear that term). If no distributor wants it, they can then sell it to a streaming service. In that case, it’s almost always a flat fee to the producers of the movie which hopefully at least covers their costs of making the movie and maybe some profit too. For a movie like Prey, likely tens of millions went from Hulu to the producers. So Hulu pays and then it’s up to Hulu to hope that they get enough interest in the movie to create increased subscriptions or people not cancelling that were going to cancel or from ad revenue to cover that cost (and hopefully make a profit).
* The other option is that the streaming service is involved from the beginning and is part of financing the making of the movie itself. Netflix has been doing this a lot. In that case it can be more complicated at least as far as how Netflix might be paying out to any other producers. If Netflix is putting up all of the money, then it’s not even an issue. They are just hoping what they spend makes enough people want to have Netflix subscriptions to help cover their spending.
Streaming services need to continuously add new content to maintain a subscriber base. If there is no new stuff to watch, people will cancel their subscription after they have seen what they are interested in. Movies are means to avoid that end.
That is why there has been a huge uptick in miniseries development lately. A miniseries may keep a viewer engaged for 5-10 hours over the course of days or weeks whereas a movie will keep a viewer engaged for maybe 2 hours and for only one night.
It is all about adding users and keeping them subscribed for as long as possible.
don’t forget that streaming services actually are non profit services under the current rates. they just try to get control over the market with low subscription rates and a panoply of shows until some of them vanish from the market. check Netflixes struggles. they will never ever get out of the red numbers.
It should also be noted these movies can make money through merch as well.
Movies are no different than how TV shows make its money on streaming services.
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