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Netflix's Big Bet on Original Shows Finally Seen Paying Off (reuters.com)
Netflix shares jumped as much as 20 percent on Tuesday, after the company added 50 percent more subscribers than expected in the third quarter. Reuters adds: At least 10 brokerages, including Goldman Sachs and RBC Capital Markets, raised their price targets on the stock, praising the company's focus on developing original content. The video streaming company also said it was getting ready to spend $6 billion on content next year, up $1 billion from 2016. "The benefits of Netflix-produced original content including attractive economics and greater control are clear and we believe returns on original spend are high," J.P. Morgan Securities analyst Doug Anmuth said in a research note. Strong subscriber additions after two quarters of disappointing growth helped Netflix post a 31.7 percent jump in third-quarter revenue. Anmuth said he believed Netflix was on track toward 60 million plus subscribers in the United States and about 100 million internationally by 2020.A study by IHS Markit this month noted that both Netflix and Amazon are challenging major networks by upping spending on original shows. The study noted that Amazon and Netflix both had doubled spending on new shows in the last two years. Amazon dropped $1.22 billion in 2013 and spent $2.67 billion in 2015. Netflix's spending on original content rose from $2.38 billion to $4.91 billion over the same period.
I subscribed to Netflix just to watch Luke Cage the moment it released instead of having to wait to pirate it. It was awesome. Stranger Things was awesome.
To be quite frank, while Netflix does have more misses than hits as far as original content, the hits they DO have are incredible. Directly comparable in entertainment value to a decent HBO show. (which is no surprise if they spent about as much money as HBO spends and they have about as talented a crew. Yes, Game of Thrones is still better than anything Netflix has, but GoT is arguably the biggest and flashiest television show in the world.)
Anyways, this is great news. Nothing to whine about. Netflix is a far better concept than ad supported TV. You can watch anything they have whenever you want. You pay a very paltry amount of money (9 bucks a month!) and get access to it all. No intrusive ads. The content is racier and more violent at times than anything advertisers would be comfortable with, or the moralizers who police broadcast TV would allow. They do lots of original ideas instead of rehashing the same cop/lawyer/doctor/reality shows that conventional network TV is rife with.
For nerds, Netflix is a representative of a golden age of content. This is what we all wanted on slashdot 15 years ago.
The sad thing is the people (at least partly) responsible for this - the lawyers and VPs at the content cartels insistent on geo-restricting content - have already made off like bandits.
Their studios will fail and go bankrupt after they've been long gone, retired, living off the riches accrued by market segmentation.
A government is a body of people notably ungoverned - AC
Not all of the "Netflix Original" shows are original. They'll call shows that they picked up for a season or two a "Netflix Original". And most of their real original shows are garbage. People don't know any better because most other shows these days are garbage too.
The whole point of getting a Netflix account was to have access to all those shows and movies that Netflix did not make. So the less original content they have the less relevant it is.
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Seems like speculation not fact that the reason people are subscribing for original content, I don't actually know anyone who uses Netflix for original content. Myself included, for me there really have not been any series that have been worth watching.
The problem with original content, from anyone, is that, for the most part, such original content will suck to high heaven. For each hit like, say, Cheers, there are hundreds of flops that, justly, remain in oblivion. I am all for new shows and movies - but I want access to classic hits. Complete access, not this garbage whereby things appear and disappear more or less randomly. Until this happens, piracy will carry on rampant.
I am glad that Netflix is funding the creation of this stuff. They are giving the cable channels a run for their money, if not yet the main-line studios. On the other hand, they've had some shows that were definitely "acquired taste" sorts of things, too (Pompidou, I'm looking at you). I guess they're still at the "throw stuff against the wall and see what sticks" stage. But at least a good deal of it is watchable and a few things are quite good.
That is all.
Come for the Stranger Things, stay for everything else.
The Daddy casts sleep on the Baby. The Baby resists!
I wonder how much of this new "International" revenue is due to their most recent ability to successfully shut down VPN access from International traffic. As discussed here Yesterday
> Yes, Game of Thrones is still better than anything Netflix has, but GoT is arguably the biggest and flashiest television show in the world.)
Before I saw GoT and got involved in youtube fandom were I watched literally everything about it, I thought what you are saying too. Me doing the fan thing surprised me greatly as the last 2 seasons were not really so much inspired by the creator, more brewed like a 'for tv' thing.
Anyway, I watched Marco Polo one weekend and now completely regret my time spent on GoT hype. They say you can't compare these shows. I do. Marco Polo... mucho better TV!
It's been paying off all along, right from the star with House of Cards. Not all of them along the way were winners (I despised Sense8) but Netflix has had winners often enough that staying with them was never a question, while other services I've subscribed to have come and gone...
At this point Netflix has all by themselves a pretty compelling library of content other services will not have, enough that any new subscriber would have reason enough to stay with Netflix for a year or more just to catch up. Add the fact that they often have really good shows and there's lots of reason to stay with them, even as the catalog of content from other companies churns...
Not mentioned is how crafty Netflix has been in picking up great TV shows other networks have been too stupid to see the value of (like Longmire) and continuing to make new seasons... we should all laud Netflix for being a safety net for good shows. I'm betting they would have taken up Firefly if it had been aired today with the same mistakes...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They are just saying what their investors want to hear. Just because someone watched some of their original content doesn't mean they are satisfied. I don't watch their original content, I'm only there for content from other networks and movies.
Give us the numbers without trying to brainwash us with your words.
Everytime Netflix dropped millions on a single show, I had to ask myself "are they really getting that many *more* subscribers per month?"
Which is the short-sighted view.
Their original programming plan never made sense to me until I realized that each show that they *owned* also made them more valuable.
If you bought Netflix pre-original programming, you just got their subscriber base and their technology. Their actual content right were an ephemeral thing, up for renegotiation every few years.
A single show's rights, by itself, isn't worth much, but an entire exclusive library, that starts to become something people would pay you money for. So if something happened to make them lose subscribers, they could always fall back on licensing *their* content out.
Meanwhile, a constant stream of new exclusive content helps retain customers, while also increasing your valuation. It is like they are a company that is concentrated on long term growth and survival or something...
There's nothing on Netflix that warrants $120 per year.
I would gladly have paid $120 just for Stranger Things. But I also enjoy the Marvel stuff they have been doing so far. And some of the anime they've been backing as well... For me Netflix has been the most value per dollar I've had from any video purchase for a long, long time... I'd be happy to pay $300/year for Netflix, which is still far cheaper than most cable bundles and includes many more things I like to watch.
The great thing is that if you don't like the content, you don't have to subscribe!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Netflix's long term game is to get BIG.
The #1 problem with Netflix is that they need to beg for Licencing. The Cable companies are already BIG, and so they throw their weight around. This is why you get that stupid VPN stuff with Netflix because you cannot use certain content in certain countries because the Cable owns all the rights. When content creators were initially selling content, it was simply seen as another new revenue stream. Then when it started getting big they all now want a cut of the pie, and today you see all sorts of players. However even now, some of them are finding, usually because they not only want pie, but cake and eat it too, that tying subscription to also only their own customers, that well you limit your customers, fail to get enough subscribers, and start to fail (sorry for the run-on sentence). On top of that you have Netflix which is the most dominant and has the most established base to break into. Add to that the fact that in the last several years they have invested heavily into their own content, which makes them less dependent on the content providers themselves... Anyway to finish the thought, is that if they continue to do this year over year and get BIG enough, the shoe will be on the other foot and they will have content creators begging THEM to be allowed to licence deals to stream their content over their service... However just as Netflix is established as a streaming service, so are the Cable companies and content creators, it will be some time before any of this flips in the other direction.
I've not been watching much of Netflix anymore, and I'm about to cancel. Everytime I open the app, I see all this exclusive content rated 2 stars. And I've watched some of it, and it is indeed 2-star content. There's so much of it, I want a star filter, but I think that would eliminate half their library.
Some of their stuff is good, but they lost Doctor Who to Amazon, and their top rated movie selection is dwindling. It's becoming a B-movie haven.
In fact writing this has convinced me to cancel.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
7 to 8 years ago or so I spent lots of $ on blu ray copies of some of my favorite shows. I remember spending what seems like a fairly obscene amount of $ on the BattleStar Galactica box set. That one purchase alone would pay for 2 YEARS of Netflix these days. Considering all the great netflix content... the licensed material is just cake. For the last year I can't say there has been one month I haven't had at least one great show to binge. We got a couple good Netflix movies... at least one of them was of fully legit award winning quality.
I know people like to pick on specific shows. They have had hits like Stranger things that have wide appeal, and others that have a much narrower viewership. I hope Netflix never ever ever goes the route that has killed quality with the major networks. Netflix needs to continue producing the odd niche content without a lot of care for the viewership numbers.The networks concerned themselves so much with demo numbers that they killed creativity completely and we ended up with years of reality tv and the same cop/lawyer/friends shows repeated 1000 times each. A show like Stranger Things wasn't expected to be a massive hit, no way during production any one at Netflix thought yes this one show is going to be a major part of our third quarter 20%+ stock surge. Netflix needs to keep going with the scatter gun... find young artists and fund them. I am glad the stranger things bump happened, it should keep us in good new shows for a few more years... it should have convinced them that spending money on talented no bodies is a better option then dropping millions on known hacks like Sandler. Not that their isn't a place for that type of content as well. For Netflix though... funding the unknowns and having 3-4 hit out of left field shows every year will push the Netflix brand and drive down the cost of getting "name" people to work on their stuff. At this point I'm sure people are wanting to work for netflix. HBO was the first "network" that movie stars viewed as safe to work with... I would say many are looking at Netflix the same way now. Winona Ryder won't be the last carer revived by a Netflix original.
Am finding the netflix originals and their selections so much better than the network stuff, maybe comparable to BBC. I like how they seem less afraid to take editorial risks to investigate new markets.
That said, still see plenty of unexploited opportunity streaming direct-to-consumer though, in niches that Netflix probably wont choose to go as they too become bigger.
Ex: I sub to NHL and would gladly subscribe to other sports channels like golf channel. ...
Ex: huge potential in independant/art/amateur scenes, political channels, charitable/volunteer channels,
Ex: Would gladly pay much more for new movie releases. Sorry theatre industry, havent visited you in over 8 years.
ETA?
Amazing: Netflix and Amazon each spend more on content than the GDP of Belize.
With the war on geo block services and vpn providers, the ever increasing indian garbage the self produced and 2 star crap it is seriously getting to the point where i will cancel my subscription which has been active for more than 6 years......
Netflix thinks they are invincible and too big to fail, a lesson is coming their way......
Rather than a content delivery service.
They have become one of the cable channels. Since their foreign content is only leased tempoarily it seems to me they will inevitably drop their streaming service/subscription model and go directly to a la cart show subscriptions. Maybe new episodes cost a dollar to watch. Old series 25 cents for a couple hours.
Then that will evolve with Netflix breaking off into two or more companies. One a delivery ecosystem; others the new cable production channels.
Interestingly I think Apple is the biggest threat to them with an alternative content system already up and running. Question is will they start/invest in their own production companies or simply buy out HBO or some of the other channels with original content.
I think the Big Three are all dead within 10 years along with cable.
Well it is things like the new Star Trek TV show coming out by CBS that ticks people off. I live in Canada.
It is to be available on Netflix internationally. However:
In the US, it will only be available on CBS and their own home brew streaming service.
In Canada up until people got angry it just wasn't available because of licencing BS. Now it is going to be on the Bell Space channel if you have cable AND have access to that specific channel.
I have cable and subscribe to the Space channel so for me I don't much care anymore (other than on principle). I expect anyone else that is interested will just pirate it instead or do the VPN shuffle with Netflix to some other country ID.
Anyway the media company's love to complain about piracy and region spoofing, but they do this sort of thing all the time presumably because they can make more money making exclusive deals with other companies like Bell even though as far as offering a service to their consumers it stinks (then are shocked and surprised that the consumers use alternative means).