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.

Comments

Luke Cage and Daredevil Season 2 were awesome

[ShooterNeo]

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.

Re:Luke Cage and Daredevil Season 2 were awesome

[0100010001010011]

Stop liking what I don't like.

Re:Luke Cage and Daredevil Season 2 were awesome

[MightyMartian]

I think the long term is likely to be a heavy mix of both; licensing material from other studios, along with producing its own. Netflix largely got into this because of House of Cards, which, as I understand it, had already had a first season in the can and Netflix shelled out for it. It was the great experiment, and its success convinced Netflix that it could work at least in some capacity as its own network.

I think the long-term game for Netflix is probably convincing more studios to make content for it to distribute, and that is disruptive. Amazon is moving in the same direction, so I think we are seeing the first waves of what will be a heavy disruption of the traditional model. The more content the online services have, the more people will cut the cord, and the long term outlook for the traditional TV networks looks pretty grim.