Netflix Plans To Spend $7 Billion On Content In 2018 (streamingobserver.com)

According to the Streaming Observer, Netflix plans to increase its budget by $1 billion dollars over the next year and spend over $7 billion on content in 2018. Previously, the company paid $6 billion in 2017 and $5 billion in 2016. From the report: While the internet freaks out about Disney ending its streaming agreement with Netflix, the company continues to forge ahead signing high-profile talent and throwing an enormous budget at its original programming. Just days after the Disney turmoil, Netflix's visionary Chief Content Officer Ted Sarandos stated that the streaming leader plans to increase its budget by $1 billion dollars over the next year. As of now, Netflix currently has $15.7 billion in outstanding obligations in deals for new series and films over the next few years. With such an astronomically-large budget, media analysts are already beginning to wonder if Netflix is "rescuing" or "ruining" Hollywood by creating such a singular creator-producer-distributor model. Sarandos counters those claims, however, stating that Netflix is merely on the forefront of what's already a growing trend throughout the media industries: "I would say that the relationship between studios and networks has always been that of a frenemy. Everyone is doing some version of it already. They just have to make a decision for their companies, their brands and their shareholders on how to best optimize the content. We started making original content five years ago, betting this would happen."

Comments

Seriously who cares about Disney?

[SuperKendall]

Yes Disney has some nice content. But looking over things it's not that much compared to what I get from Netflix in terms of original programs...

Also the stuff from Disney tends to be in a certain style, while the Netflix content has been way more varied and differing in topic or target.

I wish Disney good fortune in striking out on their own but I wonder if these days they are as valuable a content commodity as they imagine themselves to be... especially with Netflix spending some percent of that money on original YA programming with more freedom of creative control than Disney is willing to give.

Re:Seriously who cares about Disney?

[Freischutz]

Yes Disney has some nice content. But looking over things it's not that much compared to what I get from Netflix in terms of original programs...

Also the stuff from Disney tends to be in a certain style, while the Netflix content has been way more varied and differing in topic or target.

I wish Disney good fortune in striking out on their own but I wonder if these days they are as valuable a content commodity as they imagine themselves to be... especially with Netflix spending some percent of that money on original YA programming with more freedom of creative control than Disney is willing to give.

It's kind of like the iTunes/iPod thing is happening all over again except in TV world and this time more people saw the writing on the wall and there are more players than Apple in the game at the ground level. I have cancelled my cable TV subscriptions and mostly watch Netflix, Amazon Prime and YouTube on an Apple TV connected to a TV whose tuner circuitry's only use is to get cursed at whenever I switch to it by mistake when flipping between HDMI inputs. However I could be using any number of other TV streaming boxes which is nice plus you can play games on these things even if they are no high powered consoles. Hulu gets no use because: 'Hulu is unfortunately not available in your region'. I think Amazon Prime and Netflix hit the jackpot when they went for their own content in a big way, didn't license it to the TV mafia but rather offered their services in all regions and relied on original content made by independent contractors to sell their service rather than the old establishment. Netflix/Amazon original content is half of what I watch on those two services even if their original content is still a fairly small portion of their total content catalog.

Re:Seriously who cares about Disney?

[gravewax]

I think Netflix started off well, but they have been producing some real turds this year. Seems like they had a few good ideas to start with but have quickly degenerated into the same rut as other content producers.

Re:Seriously who cares about Disney?

[turp182]

I'm assuming you aren't a child.

Every parent will buy most of their movies if they can. My wife loves the old ones, my kids the newer. They are freaky valuable.

They have Star Wars, which sucks (sort of, they are working it and not poorly in my opinion).

But my kids are over Phineas and Ferb (Disney), which is sad as I liked that a lot.

Now we're into Teen Titans Go, which is not Disney, and is awesome for children and adults (they just did a 4 episode run based on the 1980s, a song, The Night Begins to Shine, basically for people my age, the kids liked it as well but didn't understand most of the references).

Ebb and flow. But we won't be taking the Disney streaming river anytime (we have some through cable, but don't watch it much, Cartoon Network rules at this time).

Netflix is kicking ass on original content. I prefer their expansion business model as opposed to the consolidation model existing companies use, Disney being the poster child for such.

Re:Seriously who cares about Disney?

[Xest]

I don't like Disney, but the problem is they're hijacked so much culture now that it's hard to avoid them. This is precisely why Disney shouldn't be allowed to keep buying IPs - they're just too big.

They started out and grew by taking popular public domain stories, wrapping their own designs around them, then claiming them as their own, even suing people who then dare to try and make their own adaptations of the public domain content in some cases, thus effectively engaging in cultural theft.

But then they bought things like Pixar, Marvel, and Star Wars with their ill gotten gains, so other major IPs are now controlled by them.

Any other purchase of media companies by Disney should be blocked as anti-competitive in any sane market. You can argue this would go against the free market, but Disney's whole existence has been about manipulating the market to their own advantage with frivolous lawsuits and IP law lobbying to bend the free market away from being free in the first place. In a free market free of IP law manipulation by the likes of Disney, 90% of Disney's IP would now be just as free for making derivative works of as the stories Disney created most their IP from in the first place.

Unfortunately even some of Netflix's originals are based on Disney IP, so Disney pulling out puts some of their best original content at risk. Disney is the too big to fail equivalent of the entertainment world, and if something is too big to fail it needs to be broken up until it's not.

is it?

[SuperDre]

Is it their budget only for content creation, or is it the budget for content creation AND buying licenses for 'old' content.
To me, Netflix is going in the wrong direction, it was a good idea of having all old series (and movies) in one place, but now they are becoming more and more a boring content creater like any other network and we still can't see all the great series from the past which are a lot of times much better than the crap that's put out today.

Re:is it?

[swb]

I still don't quite understand why old content owners are so reluctant to license content to Netflix, especially content that's pre-1975 or so.

Outside of really notable films (Academy Award winners, etc), those films and especially TV shows aren't making any money sitting on the shelf at all and few copies are probably being sold on DVD/BD even if they are available on disc. It literally makes more sense to license them to Netflix than to do nothing.

Even in the case where principals had lucrative deals that would allow them to hold up licensing to streaming/digital formats, a lot of those principals are dead and their inheritors probably aren't either going to object or will accept whatever extra is offered to them for a streaming deal. This would seem to get better as you go further back, not worse. Maybe in some cases it would be worth whatever risk to just run the risk of cutting someone out and pay them off if they object.

Even if $Studio has some kind of vague plans for their own streaming services, we haven't seen any of them do it or if they're still planning to, it's slightly more complicated than just slapping up a web site, meaning there's years before they're able to do it and they could license their content out for a couple of years without risking their own service.

I'm sometimes convinced that Netflix isn't even trying to license this content, they're trying to ween subscribers off other people's content so that in 5 years or whatever nobody (especially young people) will even know that Netflix actually had third party content. Or the other theory, that content owners simply don't want back catalog available because there's so much of it that's worthwhile that it would seriously degrade interest in their new content.

Re:is it?

[AmiMoJo]

Give it a few years for most of the other streaming services to fail, and those shows will come back to Netflix. I think YouTube will become more popular for series too. Some networks already upload old episodes, and monetize them.

It's either that or they don't get seen and produce no revenue.

Re:Firefly

[sheramil]

Yes, for about five minutes. then Netflix will remove it, like any other content they ever had that was worth watching.

Re:Fantastic

[Wootery]

This must spoil the show though, no? Do jokes and emotional moments still work when the timing has been artificially changed?

Don't cancel shows at cliffhangers

[Anonymous Coward]

I hope they don't cancel too many shows when they turn interesting.

For example, "Defying Gravity" started out lame, but it got better. And the last episode was great - lots of momentum and "What will happen now?". And in that episode, the characters on the spaceship found out what the mission was about, and they reacted with astonishment and delight. And that was the last episode that was shown in the US! We (the US viewers) never found out what the mission was.

And the show "Alphas" ended on a cliffhanger. Everyone in Grand Central Station (or in NY City?) was killed, except Gary Bell, who was played by Ryan Cartwright. Cartwright is a terrific actor, and it looked like his character was going to save the world single-handedly. I was looking forward to seeing him do lots of acting to save the world in later episodes. But then I found out that that was the last episode, and that the show had been cancelled.

Grrr!!

Re:Fantastic

[DontBeAMoran]

Yes, it spoils the timing of everything. And since it's already spoiled at 1.2, I play everything at 60 to save even more time. Three hours movies only last three minutes. It's a real time saver!

Obvious next step

[DeplorableCodeMonkey]

Integrate a one click purchase into the Netflix apps so that you can buy a physical copy from them directly. My wife and I have seen some shows there that we'd buy a blu ray copy to give away to relatives who don't want Netflix.

Re:Nazis

[93 Escort Wagon]

Danish women make the trip worthwhile, though.

Re:Fantastic

[mrvan]

I disagree, I think it's a really bad development that the streaming service providers are starting to license exclusive content.

In an ideal world, the fact that digital content is not naturally scarce should lead to an environment where I can pay X$ per year and get access to "all" available content. Spotify is pretty close to this model, and I know some people who have huge CD and record collections who prefer to listen via spotify because it is just easier.

The value of X is hard to determine, but the 'old' model was to create artificial scarcity by charging very high prices for content (20 euro for a CD, for example), thus causing most people not to have access to most content. However, if we have multiple streaming service providers who each negotiate with the various content right owners the market might be able to determine a sensible price per month that allows most people to view most content while giving decent renumeration to the rights owners and (hopefully) content creators. This model is not perfect, but a lot better than pricing individual items that cost near zero to reproduce. The goal of free market capitalism is to allocate capital and other scarce goods in a good way to maximize (some measure of) utility, not to create artificial scarcity and hence lower global utility.

However, if the streaming providers become right owners or have exclusive licensing deals, suddenly the market is no longer a commodity market where it doesn't really matter if I subscribe to service X or Y. Of course, this is exactly what Netflix et al want, because commodity markets don't have the kind of profits they would like.

I would be in favor of government action to force Netflix et al to be simple distributors, i.e. forcefully decouple content creation from content distribution.