Q:

How do websites offering streaming movies make money?

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Quick Answer

Companies that offer streaming video, such as Netflix, Amazon Prime Instant Video and Hulu, make money in a variety of ways, including subscriptions, commercials, product placements and endorsements. Some streaming companies also charge rental fees for individual videos, adding an additional layer of direct income.

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How do websites offering streaming movies make money?
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Full Answer

One of the primary revenue streams for streaming video services is subscriptions, wherein customers must pay a monthly fee in order to gain access to the company's content library. As of 2015, both Netflix and Hulu offer monthly subscriptions for access, though Hulu refers to its subscription service as Hulu Plus and makes much of its content available for free. Amazon Prime Instant Video bundles access to its streaming service with its Amazon Prime subscription, which operates on a yearly payment model. Addtionally, Amazon offers a wide range of movies and television shows as stand alone digital rentals, which helps support its streaming services.

Another revenue source for some services is traditional video advertising and commercials. For example, in both the standard Hulu and Hulu Plus models, a series of video ads precedes and appears periodically throughout each program. Many streaming companies that create original programming also use a technique known as product placement, wherein another company pays for its product to appear within the show. The company pays a variable amount depending on how prominently the product appears in the program.

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