There's a very important piece you're missing here and once you get it, it's hard to see the world in the same way. A product you pay for doesn't care how often you use it. The tennis racket sits there. It doesn't matter how much you use it, that's your choice.
A product you pay for with your attention has a voracious appetite for your attention. The more you use it, the more valuable it is to the company that made it. It would be best if you were using it All The Time. It would be best if it was incredibly addictive so you would never get tired of it and move on to something else. It would be best if the maker of this product could measure how much of your time they were capturing so they could make sure to capture even more in the future.
And in fact, if you look at time use studies, we pretty much spend all of our waking lives using a phone, tv or computer. There is literally no time left, so an advertising company is trying to invent a self driving car so you can keep using your phone during your commute, the last sliver of waking life left unconquered. Our dreams will surely be next.
This is still ultimately true with things you subscribe to though. Netflix vies for your attention even though you pay directly with $$, because if another streaming service takes more of your attention, you'll pay for it (potentially instead).
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.
Not really, Netflix definitely wants to have you use their platform frequently so you value it enough to keep paying for it. But this is balanced against the cost of making sure you don't run out of content and cancel anyway. They also pay a bit more for bandwidth and servers if you watch a lot.
So while Netflix wants all your TV time, they derive no extra benefits if all your time us TV time. This is absolutely not true of advertising supported services that make more from you the more time you spend.
A product you pay for with your attention has a voracious appetite for your attention. The more you use it, the more valuable it is to the company that made it. It would be best if you were using it All The Time. It would be best if it was incredibly addictive so you would never get tired of it and move on to something else. It would be best if the maker of this product could measure how much of your time they were capturing so they could make sure to capture even more in the future.
And in fact, if you look at time use studies, we pretty much spend all of our waking lives using a phone, tv or computer. There is literally no time left, so an advertising company is trying to invent a self driving car so you can keep using your phone during your commute, the last sliver of waking life left unconquered. Our dreams will surely be next.