How do streaming services make money off new shows?


Is it through new subscriptions? Ad revenue? Are they just afraid people will cancel their subscription if they don’t keep churning out new content?

In: 3

They don’t. They make money off people subscribing, so what they want to do is maximise how many new people are subscribing, and minimise how many people are cancelling their subscriptions.

One of the best ways to get someone to subscribe is to make them think that your product is worth subscribing to, and you do that by making people talk about the stuff on your platform. To keep people talking, you need to keep making or buying new stuff (cos everyone who would have subscribed due to some old content in your library has already subscribed before now – there aren’t many people just waking up today thinking “y’know what, I should watch The Good Place, that thing that’s been on Netflix for years already”).

One of the best ways to get someone to not unsubscribe (aside from making unsubscribing really hard) is to make them feel like they may as well keep the subscription because they never know when your platform might add something they want to watch. To do this, you need a steady flow of new content, either things you’ve commissioned or existing shows/movies you’ve purchased the rights to show. New stuff needs to come often enough that viewers can’t catch on to a regular pattern and know when to re-subscribe, eg “they always dump a bunch of new content every 3 months”, so you need quite a high volume of new stuff.

All of the above. There are a few business models out there:

* subscription only – new content + good shows attract new subscribers, who pay $/month for access to the service.
* ad-supported – sometimes in combination with subscription, companies pay to place ads in the streams
* add-on-value – the streaming content is largely there to attract customers to some other, bigger part of the company

In the “add on” category, consider Amazon Prime. Their Prime Video service was originally just an additional benefit they offered to Prime (shipping) members, who were paying for the privilege of “free” 2-day shipping. The more time a person spends on the Prime Video site, the easier it is to cross-sell them on some other Amazon product or service. Note that Prime Video cross-sells a lot of pay-per-stream content that isn’t included in the subscription price.

They entice people in with their wares, then keep throwing mud at a wall until something sticks, makes a loud enough noise that everybody hears, then you get an influx of new subscribers, keeping the pot flowing with money.

Combination of drawing in new subscribers and keeping existing ones subscribed. If somebody feels like they’ve seen everything on Netflix they want to see, they might drop it until they hear of some new series coming that sounds interesting to them.