With Netflix they have to strike a balance, though. Someone who watches Netflix 8 hours a day is going to cost them more in royalties than someone who watches 8 hours a week.
The sweet spot is likely a little different for everyone, and is whatever amount of attention keeps them subscribed, but no more.
Additionally, I have a customer-vendor relationship with Netflix. With a random ad-supported website or something like Facebook, I'm the product, not the customer. I would much much much rather be a customer than a product.
That's not how Netflix thinks about it internally. The north star metric for Netflix is how many people choose to renew every month and the biggest correlation to this is number of minutes watched per month.
All else being equal, given a choice between a change that makes people watch more minutes per month or less, Netflix will always choose more.
>With Netflix they have to strike a balance, though. Someone who watches Netflix 8 hours a day is going to cost them more in royalties than someone who watches 8 hours a week.
Does Netflix license content on a per play basis? All the info over the years I’ve read, although not official, indicate they were paying the content owners a flat amount for a certain time period.
"The sweet spot...is whatever amount of attention keeps them subscribed, but no more."
I used to believe that. Nope, they want all your attention all the time. If they lose it, another streaming service might gain some market share, and the stock price will lose billions.
The sweet spot is likely a little different for everyone, and is whatever amount of attention keeps them subscribed, but no more.
Additionally, I have a customer-vendor relationship with Netflix. With a random ad-supported website or something like Facebook, I'm the product, not the customer. I would much much much rather be a customer than a product.