How can Netflix spend $320,000,000 on a movie without it being released
in theatres for any chance to earn the money back? Surely they can't
expect to bring in 32,000,000 new account signups to recoup the cost?
What's going on here?
Yes, this question is about The Electric State.
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u/Nuts4WrestlingButts avatar
Nuts4WrestlingButts
•
14h ago
•
Edited 10h ago
Netflix reported over 300 million paid subscribers at the end of Q4 2024.
If you take a monthly subscription cost of $10 (super conservative average
to account different tiers) for as an average, that's 3 billion dollars a
month in revenue.
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u/GrouperAteMyBaby avatar
GrouperAteMyBaby
•
14h ago
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Yeah they'd love new subscribers but a big deal is just maintaining
existing ones. They have to invest more than, say, gyms (who about 67% of
their subscription-based membership never use), because unsubscribing from
Netflix is just a few clicks of a mouse or taps on a phone.
So they try to aim for new stuff every month and it's worked.
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robrt382
•
14h ago
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Don't forget to factor in advertising and product placement revenues
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u/Concise_Pirate avatar
Concise_Pirate
•
14h ago
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That's about 3 days revenue for Netflix.
The theory is that these special products retain users, getting them to
keep paying Netflix's even-rising subscription fee instead of cancelling.
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u/flingebunt avatar
flingebunt
•
14h ago
Netflix adds 6 million subscribers every month, and remember most of them
stay around for more than a month. If all of them pay for the basic
service with adds at $7.99 and stay with Netflix for 12 months, that would
be over $500 Million. So yes, the economics adds up very well.
Remember, Netflix has a range of subscription prices, so they can earn
more than that. Plus they have to stop people from unsubscribing and
joining other platforms, so they need something and compelling each month
to keep on going. So they are trying to retain their current 300 million
subscribers who are pumping at least $28 billion into the company every
year.
Plus, there is the old Hollywood accounting tricks. You can make profit on
something with the project not actually making a profit. The company pays
other companies that they own or the management team own or are
shareholders in, so that the company can lose money but the people in
charge make money.
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Evening-Cat-7546
•
13h ago
My favorite thing to do with streaming services is every 6-9 months I go
through the cancellation process. Almost every time they offer me a free
month to stay. Jokes on them because I wasn’t really going to leave in the
first place.
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u/Traditional_Betty avatar
Traditional_Betty
•
14h ago
One thing that stuns me about Netflix movies is at the very end, during
the credits, they have like 10 minutes worth of "and here's the team that
translated it into Spanish and here's the team that translated it into
Portugese and here's the team that translated it into…" Language after
language after language after language. I think something about this
relates to the economics of it. They have a global reach.
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Evening-Cricket
•
10h ago
heaps of other films are dubbed in to many different languages but you
only get the dubbing credits on the cuts for those regions so I actually
think this is netflix saving money and not redoing the credits for each
region not sure if they do more languages then is typically of other
studios though
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LongLonMan
•
13h ago
•
Edited 12h ago
I worked for a FAANG streamer a couple years ago (have extensive
experience with all the major industry providers, content creators,
platforms, etc). The reason you spend money making original content (as
opposed to license content, which Netflix does both) is to have unique
enough content (content that you can’t find anywhere else) so that keeps
subscriptions from lapsing and ad inventory CPMs high. High engagement
(MAU, HPC) means the customer perceives value and does not leave the
service and advertisers having to make ad buys because they can’t reach a
Netflix MAU anywhere else.
Your question now is the wrong perception, it’s not how Netflix is going
to get paid back for the cost of content (it generates revenue through
subscriptions and ad revenue), it’s how much content do they have to make,
how much it costs, and the right portfolio to keep the existing subscriber
metrics consistent, lapses down, and new subscriber count up. Original
content also means that Netflix has some pricing power if they ever want
to tweak pricing and/or play with ad frequency on their ad model.
This is the exact reason why just 10 years ago, Netflix was mostly
licensed content, such as Disney, Marvel, The Office, etc and they pivoted
to original content such as House of Cards, Stranger Things, etc. Netflix
knew that eventually if they didn’t start creating their own content, the
business would collapse as licensing got quickly pulled in favor of new
streamers such as Disney+, Peacock, etc.
Separately, you typically have a portfolio of content, there’s your
expensive high budget flagship movies and series and then there’s your
cheaper reality tv like content to round it out.
Fun fact: What I remember about Netflix is that they are the one of very
few services that don’t spend on any advertising for user acquisition,
they are a behemoth and even without advertising, customers expect that
they are only 1-2 clicks away from opening the app on any platform
(FireTV, Roku, Chromecast, AppleTV, etc). The only other service I know
with this much power is YouTube. YouTube is easily the most watched
service in the entire world and Netflix is second.
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u/l34sh avatar
l34sh
•
6h ago
This is the correct answer.
To add some more complexity on top of this, internally there are ways
(read: statistics mumbo jumbo) to attribute retention/growth metrics (and
by extension revenue) to individual content performance (engagement).
You measure and make decisions on what you can actively move, which are
called leading indicators (like how many users watched this content in its
first week of release, how many users completed the content, how much
content did you release in a month, subscription prices etc.) which is
correlated with stuff that you can measure but cannot actively influence,
called lagging indicators (new subscriptions, cancellations, retention).
This is why Netflix is so aggressive with cancelling shows. These leading
indicators tell them that the show isn't "worth the investment" - it's a
system that is meant to work as an aggregate, over a large period of time.
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u/Taliesin_AU avatar
Taliesin_AU
•
14h ago
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Its why your monthly subscription keeps going up.
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six_six
•
14h ago
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People should just subscribe for a month and watch things they want to
instead of leaving it subscribed month after month.
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jManYoHee
•
10h ago
They need to continue having new content for people to watch to keep
existing subscribers. And beause it's a subscription, it's monthly cash
flow.
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Ta-veren-
•
13h ago
Why are you focused on new accounts?
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Spiritual-Matters
•
14h ago
It’s a bit risky imo, but movie theaters have a lot of overhead costs that
Netflix doesn’t.
They’re not paying exclusively for new subs, they’re also trying to keep
their current base entertained.
I personally think that’s way too much for a movie that not everyone will
like. There’s a lot of movies or shows that could’ve been made with that.
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u/OctoMatter avatar
OctoMatter
•
12h ago
The main reasons are already mentioned, just wanted to add that they will
eventually license that movie to TV channels, markets where they don't
operate or for Blue Ray distribution.
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Wild-Wolverine-860
•
10h ago
Why does op think 32million signups are required to recoup costs?
My figured will be wrong but actually as a visualisation.
Let's say netflix has 300m subscribers and brings in 200m a month That's
2400m a year 200m on admin and advertising 200m in projected profits That
leaves 2000m for buying/producing films documentrys shows etc. Mortgage of
the money is going in smaller budget things but the odd blockbuster is
good advertising, helps keep subscribers, get people talking etc. All
companies have loss leaders Costco sell millions of rotisserie chickens at
a loss to get you in, supermarkets sell lots of stuff at a loss. Cadalac
is joining F1, it's not going to het those 100ms back in tech for cars,
but advertising, changing car reputation, pride, so it's all good for GM
share price they hope.
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u/WasterDave avatar
WasterDave
•
10h ago
Netflix continues to exist because their subscribers watch it. So, if it
were me, I would ascribe an actual dollar value to "viewer hours" and use
that as guidance. They probably do something a tad more complicated in
practice.
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u/llynglas avatar
llynglas
•
13h ago
Such an awful movie. I love scifi, but this was just slow confusing and
boring.
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u/Kind-Pop-7205 avatar
Kind-Pop-7205
•
14h ago
Most people don't subscribe for only one month, and they'll own this
content forever.
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arroyoshark
•
13h ago
You should know that when Netflix produces it's own content Netflix is
paying itself to produce that content. A whole lot of that money stays in
house, ya?
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u/mr_miggs avatar
mr_miggs
•
7h ago
That’s not quite how that works. They are paying for people and services
to produce the movie. Some of those people might be Netflix employees,
some may be contractors. But it is an expense.
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u/scientician85 avatar
scientician85
•
13h ago
I'll electrify your state. >:(
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u/Large-Investment-381 avatar
Large-Investment-381
•
13h ago
Let's get some data on this. Anyone have an article or information from a
source?
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Karfedix_of_Pain
•
7h ago
How can Netflix spend $320,000,000 on a movie without it being released in
theatres for any chance to earn the money back?
Netflix has over 300 million subscribers paying $8+ USD/month. That gives
them $2.4 billion USD/month at a very, very conservative guesstimate. They
can certainly afford to blow a few million on a new movie.
Surely they can't expect to bring in 32,000,000 new account signups to
recoup the cost? What's going on here?
It's not about luring-in new subscribers, it's about keeping the old ones.
You need a hefty catalog to keep people around. With a few exceptions,
folks aren't routinely re-watching the same show over and over and over
again. Most shows/movies are a one-time watch. So then you need something
new to watch. If you ever start running out of new stuff to watch on
Netflix you start eying their competitors. Maybe Hulu or Max has something
you want to watch. Maybe you cancel Netflix and switch over to one of
them.
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Knightfires
•
6h ago
Still angry they thought it was too expensive to make more seasons out of
Altered Carbon. And now spending money left and right for shitty content.
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hartstyler
•
6h ago
They will just raise the price of existing users
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u/MyMonte87 avatar
MyMonte87
•
6h ago
Also that movie becomes their property to rent out to other platforms, TV
channels etc. for the next 50 years.
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u/WillingLeague avatar
WillingLeague
•
5h ago
Instead of 320,000,000 for 1 movie, I think I’d rather see 20 different
movies with a $16,000,000 budget, imagine how many unknown
directors,cinematographers,set designers, actors, writers composers would
be revealed.
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UnstableConstruction
•
5h ago
It's not about getting new customers, it's about keeping your current
customers and about future revenue from selling the rights.
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u/SamuraiJustice avatar
SamuraiJustice
•
5h ago
Netflix is so big it's essentially socializing entertainment. The income
from all subscriptions helps fund new content. New content is designed to
keep you subscribed. But like all governments it needs an ever expanding
base to continue to grow.
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GoldenEagle828677
•
5h ago
They need to create exclusive content to keep current subscribers.
After they are running it for awhile, they will likely sell the broadcast
rights to someone else.
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Skull8Ranger
•
5h ago
In 2024, their operating income was over 10 billion - helped along by 19
million paid ads... not all subscriptions are ad free anymore
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u/BiggsDiesAtTheEnd avatar
BiggsDiesAtTheEnd
•
4h ago
The up front cost is huge but they maintain the rights forever with no
license fees. When they first opened and within the first 5 years
licensing fees were exponentially increasing. Not only do they pay zero
for this but making their own content gives them leverage in licensing
negotiations.
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u/MalaysiaTeacher avatar
MalaysiaTeacher
•
4h ago
You don't need new subscribers. You just need to keep existing ones.
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rkie58
•
4h ago
My wife and I are drawn toward “limited series” where you can have
multiple seasons, but each season is a different story. Think Slow Horses,
CB Strike, White Lotus, Reacher. If it gets cancelled, you can still watch
a complete “show” and not have that horrible unfulfilled cliffhanger
getting in the way of a good watch.
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SmashesIt
•
3h ago
You pay a monthly subscription until you cancel. They don't need new
subscribers they need you to keep paying them every month.
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herqleez
•
2h ago
Ads
Tax write-off
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Open_Mortgage_4645
•
12h ago
You're not accounting for future profits. It's not a linear equation. They
are able to make relatively accurate predictions of profits over time to
determine if a particular program makes fiscal sense. It's not a perfect
science, it involves some speculation just like the rest of the movie
industry, but if they get it right then it's a profitable decision.
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Maxibag
•
11h ago
All them lovely ads they introduced is going to make it so much easier for
them to throw another 320 mill around for another shit truck a few times a
year
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u/Jcsamudio avatar
Jcsamudio
•
8h ago
They make a couple Billion, every month, on subscriptions alone. I'm dead
serious, a couple Billion. Then there's ads, self-promotion, sponsorship,
on and on.
They're making it rain. Technically they flipped the production script.
Traditionally A movie is made, then its distributed to find an audience
and make a profit. In Netflix case the distribution, audience and profit
already exist...then they make the movie.
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u/belowthesaleprice avatar
belowthesaleprice
•
8h ago
I asked this question many years ago when they spent $8 BILLION! in one
year on content. I learned my lesson. Let Netflix do what Netflix does.
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Miliean
•
7h ago
You saw "new account sign ups" but that's not what they are looking at.
They are more so looking at retention of existing accounts.
When netflix makes it's own content, they own it forever, they can show it
forever. Subscribers want content, they want new content and they want old
content that they haven't seen. Netflix now has this movie to show them
forever and ever.
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ImpressionOwn5487
•
6h ago
I think no one correctly answered your question. You are asking about
recoup cost. They don’t have to bring in new subscribers. First they have
to make their subscribers stay, for that they invest in new content. And
this way they expand their catalogue, even if people don’t watch it now
they might subscribe to Netflix for it in the future
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u/HydroPpar avatar
HydroPpar
•
5h ago
That movie was dumb as shit too
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iPuffOnCrabs
•
3h ago
How did this movie cost more than fucking DUNE 2
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reddit455
•
3h ago
What's going on here?
mathematics.
The streamer’s ad tier, which saw membership grow by almost 30% quarter
over quarter, will now cost $7.99 a month.
https://www.marketingbrew.com/stories/2025/01/22/netflix-clearing-300-million-subscribers-plans-another-price-hike
The streamer added nearly 19 million new subscribers in the final quarter
of 2024.
Surely they can't expect to bring in 32,000,000
19,000,000 * 7.99 (minimum)
released in theatres
that's not for money.
it's to make the movie eligible for an Academy Award.
needs to run for X days in certain markets.
https://www.oscars.org/oscars/rules-eligibility
this question is about The Electric State.
they're probably not submitting it for an Oscar to begin with. theatrical
release not important at all.
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BigMax
•
2h ago
It's not just about new subscribers, right?
You're paying money every single month. They have to keep existing
subscribers too. So even if they never signed another new customer, they'd
still spend a lot on new content to retain the old ones.
Also - a movie like that adds to the catalog, so even after it's first
week, it's still going to get views. For weeks, months, years.
Not the same in viewership obviously, but the money they spent on Stranger
Things season 1 is still making them money, right? People are still
watching the first season, years later.
So this movie is for new people, existing people, and to keep people
watching down the line too.
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u/sensei888 avatar
sensei888
•
2h ago
Netflix is a meat grinder content machine that needs to be constantly fed.
They don't care, mostly, about the quality of the series/films they
produce as long as they have regular "events" that can bring people to the
platform or keep existing customers subscribed. Then those contents are
forgotten a couple of weeks later.
In the age of binging entire series on a single weekend, how can you
constantly keep people interested without offering something new all the
time? That explains the quality of some of that content...
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throw123454321purple
•
1h ago
Don’t call me “Shirley,” OP.
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u/Slight-Marketing5406 avatar
Slight-Marketing5406
•
14h ago
To put it simply: The value of a catalogue of this magnitude is
immeasurable. The EBITA of a film catalogue is between 12-18X, so when you
look at the pure value of licensing revenue over the next 100 years,
diversification factors, and even borrowing power… you see they have a
financial behemoth on their hands.
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u/GoodDoctorB avatar
GoodDoctorB
•
13h ago
Simple, the goal is not to gain anything new to begin with. You're
thinking of this like an individual product rather then part of a larger
service.
Movies need to make back their own cost of production hence being released
in theaters then on home video to double up on income. They are an
individual product that while it might have crossover with parts of a
franchise is a financial success or failure purely on it's own
performance.
Netflix however is a service so they don't need to bring in millions of
new accounts with a film like this to make money. Instead they need hype
that keeps the current audience interested so they don't cancel their
service, if that happens the movie pays for itself and then some in a mere
two months. Netflix already has around three hundred million subscribers
paying $10 a month to have access to their library so two months of
continued subscriptions paid from all those viewers.
The point is not to make enough money on it's own to be worth it but to
keep enough attention that the library of content makes money.
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u/CleanAxe avatar
CleanAxe
•
13h ago
Big movie studios spend just as much if not more than that on major
releases all the time. One of the biggest movie studios, Universal,
grossed about $3billion for all of 2024. That includes a year with Wicked,
Twisters, and Despicable me which probably cost about half a billion
including marketing.
Netflix makes that much money EVERY month. So it’s well within the size
that it can afford to throw big money around just like the majors.
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u/mckenzie_keith avatar
mckenzie_keith
•
13h ago
Good entertainment can generate revenue for decades. Netflix MUST maintain
its portfolio of good entertainment if it hopes to survive because the
days of Netflix being a filmed entertainment aggregator are over. HBO,
paramount, disney, showtime, etc, etc all are trying to maintain their OWN
streaming platforms and they are not inclined to share with Netflix. So,
Netflix is basically a studio now and they have to make their own content.
If netflix stopped producing new content, or produced only mediocre
content, they would cease to exist.
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JayTL
•
13h ago
They don't care if a movie is good or bad...just that it gets seen.
And there are people very very high up in Netflix who don't care if you've
seen it or not, as long as you maintain your subscription.
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DepartmentNatural
•
12h ago
https://youtu.be/HnXKE0nfAjI?si=cLRAKtRevEbI3NwY
It's all about merchandising! That's where the real money is
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i_really_h8_mondays
•
11h ago
From what I hear, they are not doing that well actually. Production costs
are massive, and the streaming infrastructure costs are probably insane
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u/thatdani avatar
thatdani
•
9h ago
•
Edited 9h ago
When you hear a number as the budget for a movie, that number isn't
accounting for all the revenue streams it produces, such as:
product placement
merchandising options
cross-platform promotions
After a quick google search, found this excerpt from The Verge review:
all this clunker of a movie really has to offer is nostalgic vibes and
groan-inducing product placement.
Also what a coincidence that the designs are so quirky and cute, here's
the merch link.
EDIT. Actually, removed the merch link, no free shout-outs from me. You
can just google it.
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DragonFuelTanker
•
8h ago
It got a 15% on RT lol
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u/RajOfSiam avatar
RajOfSiam
•
8h ago
Here in India, the cheapest Netflix subscription plan starts from US$ 2.50
per month.
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u/ABigFatPotatoPizza avatar
ABigFatPotatoPizza
•
8h ago
Netflix has discovered that the main appeal of a streaming service isn't
that you can watch old movies and shows on demand; viewers eventually get
bored of rewatching the same things. It's having a consistent stream of
new movies and shows that you can only watch on that service. Netflix
exclusives are what keep viewers still subscribed, even if they aren't
watching constantly.
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u/Arkyja avatar
Arkyja
•
7h ago
Why would it need new accounts? The people that are already subscriped
bring pay just as much, and if yiu dont release new content for people
they're gonna unsub
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-stefanos-
•
7h ago
They do actually expect 32.000.000 new signups.
However, they won't get these signups and they'll end up raising the
subscription price again.
Problem solved!
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JM3DlCl
•
7h ago
I feel like all these streaming services only care about getting "new"
subscribers over maintaining their base
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EconomyProcedure9
•
6h ago
Still annoyed that Netflix seems to refuse to put more Stranger Things on
DVD/Blu-Ray after season 2.
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u/newtoallofthis2 avatar
newtoallofthis2
•
6h ago
$350m on the film and $20 on the script. Always the way with Netflix
films.
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u/PsychoticMormon avatar
PsychoticMormon
•
6h ago
Its not just sign ups, its generating enough "value' that customers don't
cancel.
If no new content is uploaded on a regular basis, or content that can be
considered valuable their existing customer base will cancel at a higher
rate.
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LookinAtTheFjord
•
5h ago
Profile Badge for the Achievement Top 1% Commenter Top 1% Commenter
That movie was paid for by subscriptions before it ever even got made.
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neck_iso
•
5h ago
People going nuts explaining how they have the money ignoring the fact
that the 320M figure is based on estimates.
It may very well be that it includes compensation due to directors and
actors that may not occur if viewing numbers are sub-par. It may not
include tax write-offs if the thing bombs, etc.
The underlying point is of course valid, it is very expensive, but take
the number with a grain of salt as there is no confirmation of it anywhere
that I can find.
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u/loopuleasa avatar
loopuleasa
•
5h ago
man you're bad at maths
a subscriber does not stay on netflix for just one month on average...
it's multiple months
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u/JellicoAlpha_3_1 avatar
JellicoAlpha_3_1
•
5h ago
Yes
They can afford that
The problem they have is that they don't have a lot of solid movie
producers working for them...so you end up with shit like the Electric
State
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rosarino356
•
4h ago
It's more about retaining existing customers than onboarding new ones. You
want to make sure you have enough content so people don't look elsewhere.
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MenudoMenudo
•
4h ago
If someone were so inclined, they could probably build a spreadsheet that
gave a rough estimate of the value creation they expect.
Inputs would be:
Estimated number of subscribers from this project specifically.
Estimated average duration of each subscription
Estimated number of existing subscribers that are more likely to remain
subscribers because they like this title
Estimated number of subscribers who expect periodic high quality exclusive
films as part of their subscription, and then apply a discount to their
future revenue.
Then when you map out the NPV of all those expected revenue streams and
compare it to the next alternative use of $320 Million, you get your
answer. Business is almost always making estimates and educated guesses
based on the best available data, but you're also not wrong - those
numbers would need to be really high for the $320 Million to pencil out. I
suspect the original budget was smaller, but sometimes paying the added
costs of an overbudget project is "cheaper" than scrapping it once they've
used up their budget.
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u/Electrical_Room5091 avatar
Electrical_Room5091
•
4h ago
My guess is eventually Netflix will have a channel on TV that plays their
shows on a schedule like traditional TV. They have so much content.
Netflix also will rent and sell movies eventually.
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bearkerchiefton
•
4h ago
It's a fat tax write off the industry lobbies to keep.
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goldstat
•
4h ago
Well, I don't know anything about how they can justify spending that much.
Watching the movie, It wasn't bad and it honestly felt like they spent a
lot of money on it
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galaxyapp
•
3h ago
The million dollar question, what is the minimum effort required to retain
a subscriber...
Budgets are often inflated. Binning a ton of fixed operations cost to the
project just to get earned media exposure. If they had not made the film,
odds are their cash flow is not improved by 320million.
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u/spookyjibe avatar
spookyjibe
•
3h ago
Yes, they can.
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old_qwfwq
•
3h ago
Unrelated to the question but I watched that flick with my kids and it
ruled. Exactly the kind of movie I loved as a kid.
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u/PastaRunner avatar
PastaRunner
•
3h ago
It's more like user retention rather than user acquisition. If they don't
generate new content people will leave their platform.
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tmac_79
•
3h ago
They know what subscriber view time earns them. Using made up round
numbers in example. Let's say the average subscriber pays $20 a month and
watches 10 hours of content. That's $2 hour. If they spend $100m on an
hour long piece of content, they know they break even at 50m hours of
watched time.
When they greenlight a project, they can estimate how many people will
watch and how much revenue they can attribute to it.
It gets more complicated when you consider that it's a subscription and
the customer pays anyhow and would just watch something different if not
that new expensive content. So you probably gauge success by the watched
time of the contentx along with whether the new content increased
engagement for the platform overall. Ie they watched more content, or more
people were searching for it, etc. new subscribers would just be a small
part of the calculation.
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u/Calm-Maintenance-878 avatar
Calm-Maintenance-878
•
3h ago
It wasn’t a good movie for all that money😒
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HoosierHoser44
•
3h ago
To add on what some have brought up, Netflix doesn’t have to pay for
licensing for movies they made. Sure, making movies is expensive. But a
catalog full of movies they don’t own the rights to is expensive too.
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u/Spirited-Feed-9927 avatar
Spirited-Feed-9927
•
3h ago
It's more than new subscribers. They have to motivate current subscribers
to stay with a stream of steady content. So it plays into that equation as
well. Like hey look at the quality programming we are adding, please stay.
I watched it by the way. Not great. Not bad. Mainly a movie aimed at 8
year old kids. It reminded me of a mix of Ready Player One and Real Steel
(Hugh Jackman). It was made for a young audience in mind.
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GinnyS80
•
3h ago
•
Edited 3h ago
I-zombie, good witch and many other sci-fi shows i really miss. Warehouse
13, Lost, manifest, umbrella academy, many others that i just can't
remember the name of...
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u/Business-Lock4411 avatar
Business-Lock4411
•
3h ago
There is an amortization strategy to this. Over years it much cheaper for
Netflix to maintain its own content. It’s about having a lot of content
forever. They are thinking long term of retaining that customer 10 years
from now that will still watch electric state or whatever movie they
fancy.
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CanadaSoonFree
•
2h ago
They raised their subscription costs for stuff like this…no?
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u/No-Masterpiece-6026 avatar
No-Masterpiece-6026
•
2h ago
Just canceled my Netflix.
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u/Incontinento avatar
Incontinento
•
2h ago
Is it any good?
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u/blind-octopus avatar
blind-octopus
•
2h ago
What I've heard, and I don't know shit, is that Netflix has an advantage
over other subscription services.
Apparently, other subscription services suffer from people subscribing to
watch one show, then cancelling immediately after. On and off. But netflix
somehow keeps people subscribed.
So I would guess Netflix wants to do everything it can to keep that
advantage.
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throwaway3113151
•
2h ago
Think about it in terms of opportunity cost. If they don't spend 320M
themselves, what are the other options to acquire content?
Also keep in mind that they will own global rights in perpetuity. It's not
about a one-time hit. Rather it's about building a catalog of films for
decades.
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Critical-Ring3168
•
2h ago
It's ridiculous how horrible Netflix movies are. I don't know if it's the
directing, the script or the plot or just all but they are terrible. What
happen to movies that were actually captivating?
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hanselpremium
•
2h ago
can they at least buy a good script for that kind of money. most of their
content is shit
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u/kremlingrasso avatar
kremlingrasso
•
2h ago
I'm pretty sure all these balooning media (game/show/movie) production
costs are some kind of accounting/finance scam.
Salaries are down accross the board, talent being laid off and available
in tens of thousands everywhere, CGI technology is more efficient, cheaper
and quicker, countries are competing in tax cuts for media production,
distribution channels are consolidating and getting leaner and shorter,
AAA stars are eager and willing to taking smaller roles in TV...
Everything pointing at production supposed to get cheaper and movies like
Godzilla minus one or The Creator shows that it is actually true if you
want it.
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Thermite1985
•
2h ago
Netflix doesn't need to "make that money back" all it needs to do it
maintain current customer base even at the ad tier, they're silly
generating probably somewhere in the range of 60 billion per year. Keep
customers happy with new and exciting stuff the money keeps flowing.
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ay-foo
•
2h ago
They have money coming out of their dickholes and need to have something
exclusive on their platform
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connorgmac
•
1h ago
Not satisfied with the product for the price tag tbh
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Euphoric-Ferret7176
•
1h ago
It’s simple math.
Netflix says they have 361,063,000 global subscribers. Even if everyone
only had the standard with ads plan, which they don’t, Netflix would be
making almost $2.88 BILLION dollars a MONTH.
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HeavyDT
•
1h ago
It's not just new accounts you have to worry about but maintaining what
you have. Keeping the income you have coming in is just as important as
new sign ups. Big names attached to big style movies does that. They will
get thier money back even if the movie ie is crap people are talking about
it and will at least try it for themselves. It keeps people paying amd
watching.
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70swerebetter
•
56m ago
Omg! That movie cost $320,000,000 to produce! What! 🤯 I watched it over
the weekend, it was not worth that kind of money!
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u/illgot avatar
illgot
•
55m ago
it's not about making the profit back in a single film, it's about
building a library of content people will want to subscribe to.
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u/Downfall_of_us_all avatar
Downfall_of_us_all
•
47m ago
The real goal is not immediate box office returns but increasing their
overall subscriber base and keeping current users engaged.The cost of
production, in this case, is partly to build that brand, positioning
Netflix as a leader in entertainment.
So, while it may seem like a risky move, Netflix is betting on long-term
engagement, brand-building, and the power of exclusive content to justify
those massive budgets. Even without the traditional box office revenue,
they can still expect substantial returns through growing and retaining
their global subscriber base.
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u/RedKing36 avatar
RedKing36
•
41m ago
I walked into this thread and there's just dozens of [deleted] accounts
and posts.
What... what happened here?
Come on, Blue, let's look for clues!
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Emeraldus999
•
41m ago
I hope they didn't give Chris Pratt a big paycheck because the dude
basically phoned his performance in. The robots were better actors.
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Emeraldus999
•
41m ago
I hope they didn't give Chris Pratt a big paycheck because the dude
basically phoned his performance in. The robots were better actors.
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megamanxzero35
•
39m ago
Snuzzyo
•
39m ago
What happened here?
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Legitimate_Dare6684
•
39m ago
I thought it was ok. This will be my answer to what movies did you like
that no one else liked. Its a perfectly good movie. Idk.
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No_Tradition8738
•
36m ago
Money laundering
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Yamureska
•
31m ago
Netflix makes money from investors and loans. Once their investors and
creditors see big movies with huge views on their screens, money comes in.
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Altoid_Addict
•
27m ago
What happened to the comment section here?
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Inside-Specialist-55
•
27m ago
Yo whats going on? is every comment on this post showing as "deleted" for
everyone else?
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Inside-Specialist-55
•
27m ago
Yo whats going on? is every comment on this post showing as "deleted" for
everyone else?
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u/JosieLinkly avatar
JosieLinkly
•
26m ago
wtf is going on in here?
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flat5
•
25m ago
The key thing is that once people sign up, they tend to stay subscribed
for a long time.
So no, they probably don't recoup costs immediately. But they make it up
over time and then some.
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u/Outside-Bid-1670 avatar
Outside-Bid-1670
•
25m ago
It's called money laundering.
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I_Like_To_Count
•
23m ago
What is happeneing this is the third thread ive read where every comment
was deleted?
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u/CooperSTL avatar
CooperSTL
•
22m ago
They made it part of the next tier up so people have to pay more to see
it. Thats how.
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Dirks_Knee
•
22m ago
You are grossly misunderstanding Netflix's model. It's the same thing with
people talking about MCU movies without considering the overall IP.
Netflix Annual revenue for 2024 was $39B. To even try to generate a profit
they have to fight 2 fronts in generating new subscribers and keeping
existing subscribers. The only way that happens is increasing their
catalog which is achieved by purchasing low budget and foreign content
while bankrolling a few big dollar projects a year. None of these movies
have to be oscar worthy, or even really good by critic's standards, they
just have to be good enough that considered with their overall catalog
there is enough to make an existing subscriber not think about cancelling
and peak some interest in new subs. Now I'd absolutely suggest they should
aim to make "good" content, but sometimes that's easier said than done and
even something like Electric State being panned is enough to get some
people to watch to see if it's really as bad as suggested.
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u/Physical_Apple_ avatar
Physical_Apple_
•
18m ago
Somehow Netflix always does it right, I gladly cancel all the other
services and back on of if I really want to see something but Netflix
always stays
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u/jacowab avatar
jacowab
•
15m ago
Because Netflix essentially costs nothing in the grand scheme of things.
The main cost of operating Netflix is keeping subscribers happy, that
means producing new shows regularly.
It's like wondering "why did the grocery store spend $50k expanding the
store? They can't fit $50k worth of produce in that section."
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Scott1574
•
10m ago
It's not just getting subscribers. Selling ad time on their new big movie
is big money for them. Plus, I wouldn't be surprised if, at the end of the
year, they can write off some of the money on taxes somehow.
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trillballinsjr
•
8m ago
Netflix make roughly 40 billion from subscriptions and spend 32 billion on
content, technology (server cost) & other expenses. They made 8.7
billion in pure profit. The is goal is keep you subscribed monthly with
new content.
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RatzMand0
•
7m ago
creating their own new exclusive content is a way to encourage people to
continue to subscribe to the service. If there isn't enough new good
product people will drop their subscription.
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Agreeable-Can-7841
•
7m ago
rtmreader
•
3m ago
My personal conspiracy theory is that some of these streamers make
shows/movies with over inflated budgets as a money laundering scheme
Do I believe it's true, not really
It makes more sense that all of these people making these shockingly bad
pieces of media in earnest though
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u/Potential-Analysis-4 avatar
Potential-Analysis-4
•
2m ago
They spent 320 million on THAT?
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u/NewPower_Soul avatar
NewPower_Soul
•
13h ago
No way did it cost that amount. How could it? It's just PR to attract new
customers to Netflix.
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johnnyzli
•
9h ago
And probably it's overinflated, no way that move cost more then 100 mil,
good special effects but don't look that expensive
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u/lizzpop2003 avatar
lizzpop2003
•
8h ago
Because of the lack of box office, they can't make back-end deals for
profit sharing for the directors and stars. This means they tend to pay
more upfront for the talent involved. I believe the total spend also
includes any attempts at advertising, though that is still minimal
compared to other studios that don't disclose that amount at all. Still,
320 million is an insane number for what is, essentially, a forgettable
sci-fi romp.
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OkFaithlessness2652
•
6h ago
How can one of the biggest ‘movie’ companies pay a lot of money.
Good question. You can fill in your own answer.
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u/Wishdog2049 avatar
Wishdog2049
•
6h ago
In my city, the mayor and his friends keep building apartment complexes
that mostly sit empty. How do they make money? They're the ones getting
paid to build them.
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u/modrinihner avatar
modrinihner
•
5h ago
Have you ever seen The Producers? It’s like that
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u/_i-cant-read_ avatar
_i-cant-read_
•
5h ago
It's Hollywood accounting.
Nothing about that number matches anything close to the actual money spent
on the movie.
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SeanLeeCuisine
•
4h ago
Large scale money laundering is easy when your politicians are crooks
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Cebothegreat
•
4h ago
It’s also legal
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u/Temporary_Tune5430 avatar
Temporary_Tune5430
•
3h ago
inflated tax write offs.
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u/Substantial-Cow1088 avatar
Substantial-Cow1088
•
2h ago
A: The people running netflix are morons
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u/red_purple_red avatar
red_purple_red
•
1h ago
The purpose of a system is what it does.
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u/edwardniekirk avatar
edwardniekirk
•
1h ago
Netflix has about $13 billion in bond debt which it’s used to finance it’s
library acquisition and productions. Long-term I have no idea how Netflix
expects to stay in business as the initial success was based on being able
to rent old movies people still wanted to see.
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u/mortalcoil1 avatar
mortalcoil1
•
56m ago
When I heard The Electric State cost $320 million my conspiracy theory
brain went haywire.
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Nofocusgiven
•
49m ago
…. Money laundering is complicated
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u/DiceRuinsBattlefield avatar
DiceRuinsBattlefield
•
6h ago
this is swhy i pirate all of their stuff. i pay the rest of the services
but will never pay for netflix.
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psychotic_samurai
•
3h ago
baconslim
•
7h ago
Money laundering
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paxbene
•
2h ago
My understanding of Netflix is that it has become a tax break for the
larger corporation that owns it. It is no longer creating content for the
viewers: it is creating financial losses for the tax write off. We think
it exists for us but that's not the case. This is why amazing content gets
canceled.
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