Netflix Has No Regrets on Spending $6 Billion on New Content
Share. "We might be to the point where we might start seeing more budget constraint." "We might be to the point where we might start seeing more budget constraint."
Netflix doesn't regret investing billions of dollars into new content, according to company CFO David Wells.
As per The Hollywood Reporter, Wells told Wall Street on Tuesday the roughly $6 billion Netflix will spend this year on content, along with the $4.8 billion it has racked up in debt already, is well worth the cost.
Wells believes the money spent on new and original content—shows like Stranger Things and House of Cards—has helped Netflix get to an estimated 104 million subscribers worldwide.
However, Wells also noted that Netflix may soon be more constrained in its budget. "We might be to the point where we might start seeing more budget constraint," he said. "That has some benefits in terms of helping drive discipline on the content line."
Wells emphasized that Netflix has always been disciplined on how much it bids on new shows despite its large debt, and that the company has "walked away from some things."
Though Netflix is also looking to improve how it works on mobile devices, Wells confirmed the main focus right is on the big TV screen experience.
Disney revealed earlier this month it will pull all of its content from Netflix, including all of its Star Wars and Marvel movies, in favor of its own streaming service that will launch in 2019.
Alex Gilyadov is a freelance writer for IGN. Be sure to check out his YouTube channel and follow him on Twitter.
FollowSteph on September 13rd, 2017 at 22:23 UTC »
Unlike licensing the content they create stays in their library permanently which will make a bigger and bigger difference over time.
Wasn't it Scrubs that cost $17 million per year to license? Now imagine they spent double that, $30 million. It would still be worth it because after 2 years it's all profit, and it will last more than 2 years.
Not only that but the deeper their library goes the higher the value to subscribe. Yes they will replace scrubs with something new in 1-2 years but each year they have to pay. Now imagine it keeps growing rather than changing!!
I believe it's a great long term play by them.
toasterslayer on September 13rd, 2017 at 19:40 UTC »
I hope not. I do think they are flooding the Originals market a bit too much though. None of their new shows seem to be getting the level of attention their originals were getting a few years ago.
NeShep on September 13rd, 2017 at 18:40 UTC »
I don't think any company is ever going to tell its investors that it regrets spending $6 billion on anything regardless of the circumstances.