Netflix to Target 50% Original Content by 2018
David Wells, Netflix chief finance officer, has said that the streaming giant is aiming for 50 per cent of its content to be original productions.
Speaking at Goldman Sachs’ 25th Annual Communacopia Conference in New York, Wells said that going forward the company will be “pushing more and more” towards its goal of having half of its library being original content.
“It will take us another couple of years to meaningfully progress more towards the 50 per cent number that I said. I’d say we are third to half way through of getting to where we like to be,” said Wells.
The transition is already well underway. This year alone, Netflix plans to launch more than 600 hours of original programing, 150 hours more than last year. Content chief Ted Sarandos said that the company will spend an extra $1 billion on content, up from $5 billion (on a profit/loss basis) in 2016, to $6 billion in 2017.
The original TV series and movies will continue to be a mix of content owned and produced by Netflix, as well as co-productions and acquisitions, Wells said. The company is “one-third to halfway” toward reaching the 50% originals target, he said. Not every show needs to be a breakout hit, he added: “We don’t necessarily have to have home runs… We can also live with singles, doubles and triples especially commensurate with their cost.”
As the cost of content production has gone down, the number of bidders for high-quality content and the amount of that content have increased as well, Wells said. “You have supply and demand settling out,” he said. “We would love to provide as many of those stories as possible to the consumer.”
While data is critical for Netflix to decide which content to greenlight, Wells said, “There’s no substitute for great creative execution – we are not at a point where we can get great content from a machine.”
Most of Netflix’s original movies are not huge-budget projects, Wells said, citing “Bright,” starring Will Smith and Joel Edgerton and directed by David Ayer, as an outlier. Netflix is reportedly spending some $90 million on the movie.