Netflix Isn’t Being Reckless, It’s Just Playing a Game No One Else Dares #Flywheel

Netflix’s content ceiling (in terms of volume and spend) is its monetization ceiling. The more subscribers the company amasses and the higher it can push its pricing, the more content it can produce – which in turn drives more subscribers, more engagement and more pricing power. This flywheel is endemic to SVOD, but unique in the history of television.

Linear television networks have always been bound by a finite number of primetime slots and the size of the total primetime audience. Accordingly, a network with 15 viable slots would only add a new show (say #16 or #22) if it replaced one of its existing 15.

Netflix’s output is bound only by the company’s ambition and its ability to attract audience – both of which are unprecedented in its category. It follows that content spend would be, too.

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