A paid streaming service such as Netflix is best described as what type of good?

A paid streaming service such as Netflix is best described as what type of good?

• A. Private good
• B. Public good
• C. Toll good
• D. Club good

Answer: (C)

Goods are categorized by excludability and whether consumption is rival. A paid streaming service is excludable because access is restricted to paying subscribers. It’s not rival in ordinary use—one person watching doesn’t prevent others from watching at the same time—so it’s non-rival under normal conditions. That combination—excludable and non-rival—fits toll goods (often called club goods in many texts), which are accessible to those who pay but can experience congestion that makes someone’s use affect others at peak times. So a streaming service best described as a toll good.

Goods are categorized by excludability and whether consumption is rival. A paid streaming service is excludable because access is restricted to paying subscribers. It’s not rival in ordinary use—one person watching doesn’t prevent others from watching at the same time—so it’s non-rival under normal conditions. That combination—excludable and non-rival—fits toll goods (often called club goods in many texts), which are accessible to those who pay but can experience congestion that makes someone’s use affect others at peak times. So a streaming service best described as a toll good.