| And you constantly assume bandwidth is the only per user cost that Netflix is paying. It's one cost, that definitely affects decision making, but there are others. For instance, if you try to license certain types of content, you'll find that the licenses will tend to work in the following fashion: -Estimate how many people will use content.
-Resolve differences, if any, between your estimate and content owner's estimate.
-Settle on per user fee. Then there are other licenses that are kind of pseudo per user. For instance: -How many people tix to your last tour Mr or Ms Comedian?
-Well Mr Digital Property Licensing Hardass, we sold X tix.
-Great!!! We'll give you X dollars because we know from analytics that (factor * X) people will view your content over the life of this license. These things are a lot more complicated than just "Are people watching?" - "Are people not watching?". Likely Youtube can do things like weigh bandwidth costs heavier in their models, therefore prioritizing eyeballs. Any eyeballs, because they make money from ads. You try to run something like Netflix using the same modeling factors and you'll go under in fairly short order. There are just a lot more expenses, and the revenue is from a source with a different behavior. So you don't want eyeballs, you want the right eyeballs for the content that you've paid to provide. That means you need to be cold, hard, and calculating. Not every viewer will be equally profitable to you. |