However, Epix licensing fees could push thesecosts up to as high as 18% to 20% of revenues, resulting in a potential 12% downside to our price estimate for Netflix.
Mathematically, they clearly believe the commercial potential in these cases justifies the huge development costs and sizable risks, and feel that the potential exceeds that of the multiple other programs they could theoretically be resourcing instead (unless you have an even more cynical view, and believe they are pushing these huge programs because they have so little else worthwhile to fund).