P.S. – By Netflix, I mean streaming platforms be it Prime, Disney Hotstar, or any other.
We hardly see ads on some of these platforms, and a percentage of our annual membership fee seems insufficient considering how much some use it and share it with friends and family too, who otherwise would have to pay for the tickets if they were to watch it in the theater. I wonder how are they turning a profit or breaking even with this model
In: Economics
The streaming services pay for the movies, they aren’t free. Netflix will pay tens or hundreds of millions of dollars for a movie or show to have the exclusive rights to stream it. Disney outright owns what is shows on Disney+.
Neither Netflix or Disney+ or any other streaming service is free. You pay a subscription. When tens or hundreds of millions of people are paying $8 a month, that’s a lot of revenue. If Netflix doesn’t buy the movies or shows, then people will cancel their subscriptions. So, Netflix buys more movies and shows.
And even if you find a free streaming service, they almost always have ads. The ads pay instead of the subscription fees.
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