David Wells, Netflix chief finance officer, has said that the streaming giant is aiming for 50 per cent of its content to be original productions.
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The subscription video on demand (SVoD) service plans to release 600 hours of original content this year, compared to 450 hours of content released last year.
Perhaps the biggest reason for this sharp incline comes down to Netflix’s recently acquired partnership with Disney, that will see the Hollywood studio give exclusive rights to the streaming service for the next 10 years, including it’s multi-billion dollar Marvel division. The other half will be licensed movies and television shows.
We don’t necessarily have to have home runs …
With several award-winning TV shows established, Netflix is already regarded as market leader on the small screen, with original drama’s such as House of Cards, Orange is the New Black and Stranger Things all picking up a host of awards in recent years. Subscriptions costs not only bring in revenue for the company but they also allow it to invest in more original content. Netflix has been in the process up upping its monthly subscription rate to $9.99 for all US users and £7.49 for all United Kingdom users, which enables two simultaneous HD streams for each account.
The implication is that Netflix would reach its 50/50 split by producing and buying up more originals, but the company may also even the odds by licensing fewer shows and movies. The CFO acknowledged that “we face pressure from investors that we’re underpriced”.
Wells noted, though, that about a third to half of customers who bail out of the service soon come back.
Luckily for us, the company is just getting started.
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In the global markets, Netflix expects to have 80% Hollywood programming and 20% local content, except Japan, where it plans to have about 50% local content.
