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Netflix CEO: Why Even $8 Billion Investment in Content Isn't Enough (axios.com)
Netflix expects to spend about $8 billion on content this year. For Hollywood studios, that's a reasonable figure. But for Netflix CEO Reed Hastings, it's not enough. From a report: The company is competing against a range of traditional entertainment companies around the globe, and of course, against the need to work, sleep and do other things. Speaking at TED in Vancouver, Hastings noted that $8 billion is about what Disney spends. "That's spread globally," he said. "It's not as much as it sounds." Hastings noted that House of Cards wasn't really the company's first effort at original content. It had tried back in the days when it was still mailing out DVDs. "It didn't work out because we were sub-scale," he said.
Oh, come on. What about "Altered Carbon", to name thing? Disney, to my dismay, managed to produce the most disappointing Star Wars movie to date.
Their shows are shit. That's a lotta change to dump into the toilet.
How much do HBO invest because they've consistently produced watchable "content". Netflix, Disney... not really.
I don't know though their revenue is about $2 billion.
Note that HBO and Netflix have very different models, HBO is an add-on to an existing cable package. They aren't looking for mildly watchable content that's just good enough to temporarily distract you from the existential horror of your life after you finish dinner, they need to produce really high quality content so people who already have TV with a bunch of watchable content will go out of their way to purchase HBO with those awesome shows they want to see.
So they don't want 20 decent shows, they just need 5 or 6 great shows.
Netflix doesn't need amazing content, if people really needs something special they'll get HBO Go or go out to a movie. Netflix needs to make sure you never get bored, open your guide, and can't find anything interesting to watch.
I stole this Sig
The astute reader may notice that Netflix carries less and less network shows / movies and continues to push "Netflix Originals" -- all in an order to minimize a key expense.
What expense?
One of the secrets of the cable / streaming industry is that license costs continue to go up. In turn this gets passed onto the consumer.
So when Netflix says Disney spends $8 Billion --- is that to _produce_ content or to _license_ content? And is that ALL media such as TV Shows AND Movies, or strictly JUST TV shows? And is that JUST Disney or does that include ALL of its subsidiaries ?
Content cost are spiraling out of control.
i.e. The ten episodes of the first season of Westworld were reportedly produced on a budget of approximately $100 million.
Assuming that the $8 Billion Disney spends is solely to create content for TV shows -- that might seem like is a drop in the bucket compared to the budget of a few "blockbuster" movies. Here is a list of All the Disney films -- and here is a snippet of 2017 / 2018 movies:
Let's actually tally the budget -- assuming Disney foot the bill for all of its 2017 movies ...
* Dangal, $11 million USD
* Beauty and the Beast, budget $160 million USD
* Guardians of the Galaxy, Vol. 2, budget $200 million USD
* Pirates of the Caribbean: Dead Men Tell No Tales, budget $230 million
* Cars 3, budget $175 million USD
* Thor: Ragnarok, budget $180 million USD
* Coco, budget ???
* Star Wars: The Last Jedi, budget $200 million USD
* Black Panther, budget $200 million USD
* A Wrinkle in Time, budget $100 million USD
Ergo it looks like $8 Billion was for BOTH movies AND TV Shows.
What's really stupid is that the cable industry STILL relies on the inaccurate, archaic Nielsen ratings. Via the STB / DVR boxes they already have (relatively) accurate metrics of what people are watching but for some reason continue to use an idiotic Nielsen rating to bargain licensing costs -- because they aren't in the content creation business -- only the content licensing business.
Since Netflix is in the process of migrating from strictly licensing content to producing content this $8 Billion figure shouldn't be a surprise.
What I DO find surprising is that since Netflix can tell _exactly_ which shows are popular -- one would think they would use this "hard data" to lower licensing costs to carry multiple network shows. Instead we get few and fewer selections each year it seems. Has anyone tracked the quantity of content available on Netflix over the years?