In its most recent quarterly report, Netflix announced its intention to spend $7 billion to $8 billion on original content by 2018.
“Our investment in Netflix Originals is more than a quarter of our total P&L [profit and loss] content budget in 2017 and will continue to grow,” the company said in its call report. ), we remain fairly comfortable with our ability to please our members around the world. We will spend $7-8 billion on content in 2018 (on P&L -base).
The $8 billion figure represents a potentially significant increase over Netflix’s current spending. The New York Times estimates Netflix’s content to be $6 billion in 2017, so the company could spend as much as ~33 percent more on originals next year. By comparison, Hulu has reportedly pledged $2.5 billion to original programming this year, and Amazon reached $4.5 billion (Amazon has already pledged more for 2018, but didn’t provide specific numbers when speaking to Variety last month) . Apple recently made a splash with a “only” $1 billion pledge to original content in 2018.
The move speaks to internal confidence at Netflix, despite the increasingly crowded streaming video space. This fall, well-known foes like Hulu have hit series like futurama from Netflix. Well-known creators such as Disney have revealed the intention to create their own services (which will attract lucrative entities such as Star Wars and Marvel movies from Netflix), and traditional networks like CBS also entered this space with the high-profile Star Trek: Discovery.
But Netflix still has plenty to hang its proverbial hat. 2017 represents a big original movie push for the company, and creators like Martin Scorsese and stars like Will Smith are already on board for future projects. On the series front, Netflix pulled David Fincher to another series with the recently released mindhunter, and TV creative royalty Shonda Rhimes announced a partnership with the streaming service in August. Netflix’s now famous hands-off, full-trust approach to creatives has made the company competitive for working with just about anyone in Hollywood. And adding ongoing seasons for established hits like Weird stuff and The crown only justifies the projections (and recent price increases) for Netflix. (GQ notes that Netflix expects to produce 80 original films, with the distribution expected to be about three every two weeks, as part of this new commitment.)
These strategies seem to have been successful thus far. Netflix’s quarterly report states that the company took 20 wins out of 92 nominations at the 2017 Primetime Emmys (second only to HBO). And the service added 5.3 million subscribers in the third quarter with revenue of nearly $3 billion, up 30 percent from the same period last year. NYT notes. So for a company that is still relatively in its infancy, streaming came about 10 years ago, House of cards Kicked off Netflix’s modern content initiatives less than five years ago – Netflix execs seem justified in trust.