Netflix plans to spend around $8 billion this year on original TV shows and movies in an effort to boost its subscriber numbers.
The increased production budget was revealed on Tuesday by CFO David Wells at the Morgan Stanley Technology, Media & Telecom Conference in California.
Last year, the company spent around $6 billion on original content and ended the year with 117.6 million subscribers worldwide. This year, the company plans to spend even more on original content, as well as increase its marketing budget to $2 billion (an increase from $1.3 billion in 2017).
Content driving growth
Netflix’s business model of using original content to increase its number of subscribers isn’t new, but it continues to be effective.
“Let’s continue to add content -- it’s working, it’s driving growth,” Wells said at the conference.
The increased focus on marketing doesn’t necessarily mean the streaming service will be focusing less on the quality of the content it produces. “We used to think every incremental dollar was best spent on content,” Wells told Variety. Now the company thinks “marketing is a multiplier on the content spend.”
For help producing its upcoming original content, the company is bringing on big names like Duncan Jones, Ryan Murphy, Mark Millar, Martin Scorsese, David Ayer, Will Smith, and others.
Netflix will spend a fairly large portion of its $8 billion budget on international Netflix programs. The company plans to include shows from 80 countries outside of the United States, including the German psychological thriller “Dark.”
Of the company’s plans to diversify its content offerings, Wells explained, “People don’t care where the stories come from. We’re about having the best content. We don’t necessarily have to do it ourselves.”