> How does adding more watchers improve profitability if each viewer has the same associated costs?
Because each additional viewer does not cost the same as the previous one. Why would you assume that?
Because each additional viewer does not cost the same as the previous one. Why would you assume that?
Plus, a Netflix membership is like a gym membership. Some users watch a lot more content (and cost more in terms of infrastructure) than others. Much like at a gym, all subscribers pay but only some cost as much as they pay. If a gym only charged people who showed up, the fees would need to be much higher.
If every subscriber cost more than they brought in, Netflix would have gone flat broke years ago. There is a reason shareholders wanted subscriber growth and got spooked when it slowed.