Netflix: Half of its Content to be Original Programming

Netflix (NASDAQ: NFLX) aims to switch 50% of its streaming catalog to be original contents over the next few years, said company CFO David Wells. Currently, its streaming content was already “a third to halfway” near reaching its goal.

“We’ve been on a multiyear transition and evolution toward more of our own content,” said Wells who spoke on Tuesday at Goldman Sachs’ Communacopia conference.

According to the Verge, Netflix has evolved to be the home to many popular originals, produced either by Netflix itself (as in the case of the Emmy-winning Master of None), co-produced with other studios, or as in the case with Cary Fukunaga’s Beasts of No Nation — acquired after production wrapped up. Wells stated the company would continue this approach to reach its half-original aim, with the decreasing cost of production and the increasing number of bidders in the streaming market making it cheaper to take chances on shows and movies. “You have supply and demand settling out,” Wells said. “We don’t necessarily have to have home runs. We can also live with singles, doubles and triples especially commensurate with their cost.”

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. Ted Sarandos, Netflix’s CEO, announced at the start of the year that Netflix would release 600 hours of originals in 2016 — up from the 450 hours it put out last year, but not yet enough to fill up 50 percent of its catalog unless it scaled back on content picked up from other networks and studios. Unlike licensed shows, Netflix’s originals can be kept exclusive to the service, differentiating it from its competitors and driving people to sign up for subscriptions. Already, Wells says between a third and half of lapsed subscribers to the service return eventually.

Shares are currently down $3.72 (-3.79%) at 1:38PM EST.

Leave a Comment