As Subscriber Totals Rebound, Netflix May ‘Revisit’ Increasing Content Spending in Coming Years
Earlier this year, after Netflix announced that it had lost subscribers in a quarter for the first time in a decade, the company engaged in a campaign of cost-cutting, letting go of some employees and canceling some planned shows. This led to worries that the streamer would also be pulling back on content spending after having proudly proclaimed that it would continue funneling an increasing number of billions into its films and series.
Netflix has, over the course of this year, pushed back on that notion, especially in its dealings with the creative community. And now that the company has added subscribers once again, Netflix executives are hinting at again increasing its content spend.
In the company’s quarterly earnings call, co-CEO Ted Sarandos was asked about the $17 billion annual content budget, and whether Netflix was planning to stick with that number. He answered that Netflix may “revisit” that number in the future.
“Both the scope and scale as well as the range and the cadence of hits is improving,” Sarandos said. “So I feel better and better about that $17 billion of content spend because what we have to do is be better and better at getting more impact per $1 billion spend than anybody else, and that’s how we’re focusing on it. So I think we’re spending at about the right level. And as we reaccelerate revenue, we’ll revisit that number, of course, but we’re a pretty disciplined bunch about that.”
As the company has reexamined many of its long-held principles — from advertising to password sharing to carrying live sports — Netflix has begun to reinvent itself as less of the tech company that upended DVD rentals and then essentially established the streaming industry and has begun more of a traditional studio, worrying more about distribution than disruption, revenue than reinvention. So Netflix’s focus is now less on outspending everyone else in the industry in order to dominate solely on subscriber totals and instead is about creating the most value per dollar spent and revenue per subscriber.
“As we hope and expect to reaccelerate revenue, we’ll revisit those spend levels,” Netflix COO Adam Neumann said. “But for now, given all those learnings that Ted mentioned, we think we can deliver more member value per dollar of content spend than we have in the past. So we expect our content slate to get better and better each quarter and each year over the next couple of years.”
In addition to the subscriber number, Netflix shared how its anti-password-sharing efforts will work when they roll out wide in early 2023.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.