The streaming service has ambitious plans (and budgets) for its 2018 content
Netflix follows a simple business mantra: To make money, you must first spend it. In its bid to produce original content – there are over 50 shows it currently produces – coupled with the licensing fee it pays for the movies and TV series it streams, it has run up a debt load of $4.8 billion and an additional $15.7 billion in long-term content commitments.
But it isn’t hitting the panic button anytime soon. Netflix now has over 104 million subscribers, a 25 per cent increase from last year, and nearly quadruple the number of subscribers from as recently as five years ago. It’s now present in 190 countries. Back home in North America, the service accounts for a third of all prime-time Internet download traffic.
To stay ahead of the game, Netflix is investing heavily in its original and licensed content. According to a report on Variety, its chief content officer Ted Sarandos has said that the group will spend $7 billion on content next year – that’s seven times more than Apple is reportedly spending on producing original content.
The high-quality content that Netflix is producing has bagged the streaming service a total of 92 Emmy Award nominations this year, up from the 54 nominations it received last year. The only content provider to beat the number of Emmy award nominations in 2017, was media giant HBO.
Some of its big-ticket content includes Orange is the New Black that reportedly costs $50 million a season, House of Cards that costs $60 million a season and The Crown that costs a staggering $130 million and is believed to be one of the most expensive TV shows ever produced. Hollywood A-listers from Kevin Spacey and Winona Ryder to Will Smith Brad Pitt have signed up to be part of these Netflix originals. Netflix reportedly paid $60 million to acquire the distribution rights to Brad Pitt’s 2017 satirical war film War Machine.
The streaming website has changed the way we consume content and dealt a death blow to the ubiquitous DVDs. But now it may be plotting an even grander scheme – to slowly destroy the Hollywood hegemony over content one Netflix original at a time.