Movies that are released in theaters can profit by ticked sold, merchandising and ad revenue but what about streaming sites originals, those only available in digital form and exclusively in their platforms?
In: Economics
Netflix makes money through monthly subscriptions. People who don’t watch anything tend to cancel. People who want to watch something bad enough subscribe. Popular shows like Stranger Things generate tons of subscriptions and keep subscribers going. Plus, they also have merchandise and sponsorships. Original shows are owned by Netflix, so they can host the show forever without paying royalty fees. This offsets much of the cost of making the show to begin with, especially in the long term. In theory they could also license the shows out to other platforms, although I don’t think they do that. They can also sell the shows if they want. Business people are pretty good at making charts and approximating their key numbers. They know the correlation between views and subscriptions and can measure the success or failure of a show based on those numbers (along with the production cost).
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