What Netflix’s $8 Billion Investment Means for the Future of Streaming
If you check your credit card statement next month, you might notice a slight aberration. That’s because Netflix will increase its monthly subscription fee from $10 to $11, its third such hike in the last four years. While the streaming giant is highly aware that the increase will rankle some users, it doesn’t have much of a choice.
As the streaming wars continue to escalate, Netflix is set to make an $8 billion investment on original content as part of an ambitious plan to release 80 original films by the end of 2018. That’s a staggering amount of movies, especially when compared to more traditional studios like Fox and Warner Bros, which released 15 and 23 movies in 2016 respectively. The announcement, which was first reported by Variety, falls in line with Netflix’s earlier declaration that it eventually wants half of its streaming library to be made up of original content.
Speculating on the financial state of Netflix has become sport for an industry at once enthralled and anxious about the rapidly shifting landscape. While the Los Angeles Times reported that the company is $20.54 billion in debt, the New York Times pointed out that Netflix added 5.3 million subscribers in its third quarter. Though the company doesn’t typically discuss viewership numbers, it’s not hard to imagine that the bulk of its new subscribers are hopping board for its wealth of original programming.
Sure, Netflix hasn’t been able to match the awards attention Hulu got for the The Handmaid’s Tale, but with a roster of zeitgeisty shows like Stranger Things, G.L.O.W., Master of None and Orange Is the New Black, Netflix always finds itself at the forefront of pop culture. Look for that success to continue thanks to recent investments in creative powerhouses with proven track records, like Shonda Rhimes, David Letterman, and the Coen Brothers, whose first foray into TV is set to premiere next year.
Though it’s had a lot less success producing original films—Okja is the only one that’s likely to carry any real weight as the year winds down—that’s set to change significantly. Earlier this year, Netflix paid $100 million for the rights to Martin Scorsese’s upcoming gangster epic The Irishman, which will unite seasoned wise guys Robert De Niro, Al Pacino and Joe Pesci.
Netflix’s original content push comes as some of the third-party content providers are jumping ship to launch their own streaming platforms. The most glaring example is Disney, whose platform will be the de facto home of the Star Wars and Marvel films moving forward.
That means Netflix will have to produce its own tentpoles in-house, something Chief Content Officer Ted Sarandos alluded to in an investors’ call in which he outlined the kinds of movies Netflix hopes to make moving forward. “They range anywhere from the million-dollar Sundance hit, all the way up to something on a much larger scale,” Sarandos said. He cited Scorsese’s The Irishman and the upcoming Will Smith fantasy cop saga Bright as examples of Netflix’s move into big budget filmmaking.
But perhaps the most telling sign of Netflix’s plan for world domination is its upcoming foray into original anime. According to Sarandos, the company plans on producing 30 original anime series next year. That’s a staggering amount of new content in such a niche genre. But as Sarandos explained, anime is cheap and easy to produce, and there is an audience for it outside of America.
With that kind of approach, it seems likely that Netflix can successfully shift its brand identity from being a purveyor of content to being a maker of content as early as next year.
