Netflix will spend $8 billion on original content this year via TV shows and movies in an effort to boost its subscriber numbers. Yes, you read that correctly: $8 BILLION.
This increased budget was revealed to us last Tuesday by the company’s CFO, David Wells, at the Morgan Stanley Technology, Media & Telecom Conference.
Last year, the company spent a paltry $6 billion on original content and ended the year with 117.6 million subscribers worldwide. This year, though, the company will spend even more on original content, as well as increase its marketing budget to $2 billion (an increase from $1.3 billion in 2017).
Content driving growth
Netflix’s business model of using original content to increase its number of subscribers isn’t new, but it continues to be effective. “Let’s continue to add content — it’s working, it’s driving growth,” The CFO said at the conference.
This increased focus on marketing does not necessarily mean the streaming service will be focusing less on the quality of the content it produces. “We used to think every incremental dollar was best spent on content,” Wells told Variety. Now the company thinks “marketing is a multiplier on the content spend.”
For help with the growth in production of its upcoming original content, the company is bringing on big names like
Duncan Jones, Ryan Murphy, Mark Millar, Martin Scorsese, David Ayer, Will Smith, and others. Netflix plans on spending a fairly large portion of this $8 billion budget on international Netflix programs. The company plans to include shows from 80 countries outside of the United States, including the German psychological thriller “Dark.”
Of the company’s plans to diversify its content offerings, Wells explained, “People don’t care where the stories come from. We’re about having the best content. We don’t necessarily have to do it ourselves.”
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