How does the Netflix business model allow them to spend hundreds of millions of dollar on producing original movies and translate that to profit?

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For example, just announced is “The Gray Man” which Netflix is producing for $200M. Since the vast majority of the people who will watch it already have Netflix subscriptions how does Netflix actually make profit off this movie?
It’s not like it will encourage someone who’s subscription expires months after to hang on because of that one movie so where is the gain?

In: Economics

10 Answers

Anonymous 0 Comments

It absolutely will convince some subscribers to keep their account. Best case they have a runaway hit and their subscribers love how much value they get out of Netflix. New customers subscribe because they’ve heard about this cool movie.

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