When I worked at an internet provider, Netflix sent us a cache (I'm sure they have several at that ISP now). I can't imagine it cost them more than a few thousand dollars, as it was just a bare bones box full of hard drives. We gave them free power, internet, and rack space in our data center. Every night during the slow period it would fill up with whatever they thought would stream the next day.
There was nothing to do with neighborhoods, the cache served customers all over Maine and they didn't pay us anything. Netflix's costs are more likely content and licensing.
The subscription model is, in my opinion, dumb. If they need it to work, maybe they should buy games instead of studios. I can't work out exactly how long term patching would work though, unless they kicked back a maintenance fee from sales and gamepass usage to the studio.