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

the hope is to get more and more people to sign up. and netflix doesn’t distribute all of the movies/shows they make. in some countries it’s a third party distributor that pays netflix for the right. and of course, they could also start selling merch and things.

or maybe the evolution of netflix is to become a big media giant like disney/fox/etc and the streaming business takes a backseat.

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