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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.
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.
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.