> on producing very good content This is not necessarily true. Even moderately good content, catering to a specific audience will suffice. IIRC, NF has loads

> on producing very good content This is not necessarily true. Even moderately good content, catering to a specific audience will suffice. IIRC, NF has loads of user data and behavioural data to help it guide in production. Assuming an average, not fully satisfied consumer subscribes to NF for 1 year, that's 120 $ per consumer. Assume a show that takes 100 million to produce, say 3 seasons. To make the production break-even, NF will need around 840000 paying subscribers (currently it has around 125 million subscribers, so about 0.672% of its total subscriber base) , who don't even have to watch it in the first place. Now that's a very small number compared to the amount of paying subscribers currently on it's platform. To me it seems to be a very profitable model, at least for 10 - 15 years from now. Edit : Updated the math. Edit 2 : An average episode costs between 3 - 5 million. Lets take 5 million as the cost per episode. With 125 million subscribers paying 120 $ per year, Netflix can produce 3000 episodes. That's just for 1 year. Also, in India, many shows cost way less than 5 million USD. But I have seen NF splurge of shows (it is hiring top notch actors in India for it's shows, where traditionally and culturally, a movie star playing in a "TV" series usually means an end-of-career move, so it's a big thing to work on a NF show here in India)