Why do membership based streaming businesses, like Netflix or Spotify look after user engagement?

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Isn’t it counter-productive? It makes sense in YT, because it makes profit by having more views and showing ads, but wouldn’t Spotify want you to buy your membership and then listen as less as posible, to save on data streaming and paying the musicians? Or do they want to inflate their metrics as much as they can to atract investors and content creators?

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2 Answers

Anonymous 0 Comments

actual costs of data streaming are absurdly low. Your ISP is charging you ~1000x what it costs to provide you with your data. The money saved on data costs for 100 customers who don’t ever use it is still way lower than the lost income if one of them cancels.

This is also a market with more and more streaming competition every day. There are a bunch of competitors trying to lure your business assy from each other and few people have the money to subscribe to all of them without a thought.

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