Netflix Halves Costs of Movie Streaming

Posted Wed Mar 23, 2011 at 07:00 AM PDT by Dick Ward

Netflix may be spending more for content, but getting that video to customers keeps getting cheaper.

There's been a lot of news about Netflix shelling out money for additional content in the last few months. They're paying upwards of $100,000 for new episodes of shows and have reportedly bid $100 million on an exclusive series.

All that spending makes people a little nervous, but there's one statistic that hasn't been talked about much. Though the cost of acquiring new content keeps going up, the cost of streaming that content to customers has gone down significantly.

According to analyst Dan Rayburn, the company will spend about $50 million to stream all of their content thanks to partnerships with third-party CDNs, or content delivery networks. That's a big step down from the $100 million they spent in years past.

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Tags: Industry Trends, Netflix (all tags)