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Netflix CFO: 50% of Its Total Library Will Be Original Content
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Are you a fan of Netflix original shows like Stranger Things, House of Cards, and Narcos? Or are you desperately searching for that next great television show to binge watch?
Well, you’re in luck: at the Goldman Sachs’ Communicopia investors’ conference on Tuesday, Netflix Inc.’s (NFLX - Free Report) CFO David Wells announced that the popular streaming giant plans on making half of its total content original programming over the next few years. The other half will be licensed movies and television shows.
Like they are now, Netflix original TV shows and movies will either be content owned and produced by the company, or acquisitions and co-productions, said Wells. As quoted in Variety, he also acknowledges that not every new show will be a major hit, saying “We don’t necessarily have to have home runs…We can also live with singles, doubles and triples especially commensurate with their cost.”
Wells noted that Netflix is already about “one-third to halfway” to their 50% original content goal. At the beginning of this year, the company announced that it would launch 600 hours of original content, a major bump up from the 450 hours it released in 2015.
For Netflix, original programming offers a much simpler licensing scenario, as the initial investment reflects a cost that can deliver continued value in the long run. The company, however, is facing ever-growing competition from other streaming services like Hulu and Amazon’s (AMZN - Free Report) Prime Video offering.
While Netflix is in the process of shifting its U.S. subscribers to its standard $9.99 per month plan, which is leading to cancellarions, a bump in original content has the potential to win these ex-customers back. Most of the streaming giant’s original content has been critically and commercially acclaimed, and if Netflix offers more shows like its current award-winners, it stands to gain more subscribers and continue its lead over its streaming rivals.
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Netflix CFO: 50% of Its Total Library Will Be Original Content
Are you a fan of Netflix original shows like Stranger Things, House of Cards, and Narcos? Or are you desperately searching for that next great television show to binge watch?
Well, you’re in luck: at the Goldman Sachs’ Communicopia investors’ conference on Tuesday, Netflix Inc.’s (NFLX - Free Report) CFO David Wells announced that the popular streaming giant plans on making half of its total content original programming over the next few years. The other half will be licensed movies and television shows.
Like they are now, Netflix original TV shows and movies will either be content owned and produced by the company, or acquisitions and co-productions, said Wells. As quoted in Variety, he also acknowledges that not every new show will be a major hit, saying “We don’t necessarily have to have home runs…We can also live with singles, doubles and triples especially commensurate with their cost.”
Wells noted that Netflix is already about “one-third to halfway” to their 50% original content goal. At the beginning of this year, the company announced that it would launch 600 hours of original content, a major bump up from the 450 hours it released in 2015.
For Netflix, original programming offers a much simpler licensing scenario, as the initial investment reflects a cost that can deliver continued value in the long run. The company, however, is facing ever-growing competition from other streaming services like Hulu and Amazon’s (AMZN - Free Report) Prime Video offering.
While Netflix is in the process of shifting its U.S. subscribers to its standard $9.99 per month plan, which is leading to cancellarions, a bump in original content has the potential to win these ex-customers back. Most of the streaming giant’s original content has been critically and commercially acclaimed, and if Netflix offers more shows like its current award-winners, it stands to gain more subscribers and continue its lead over its streaming rivals.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>