How? A streaming subscription service is a fixed-cost business. When Netflix licensed a movie or TV series from a studio, they paid a fixed fee. The amount was not based on usage. Netflix customers could watch the video once or ten million times, the costs were the same. Yes, there were some variable costs involved, for bandwidth and servers, but these costs amounted to pennies per view. And, as with most technology, those costs declined over time. The cost structure is very different from the DVD rental-by-mail business, where the costs—warehouses, wages, shipping, replacement discs—are
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