Netflix is no stranger to spending a lot of money on original content. It’s one of the reasons why they are the world’s biggest streaming platform.
However, the amount of money it’s been revealed they’re going to be spending on original content this year sounds like utter madness.
It’s been reported by Deadline, so I am inclined to believe this, that the streaming giants are set to spend almost $18 billion on original content in 2020.
Now, bear in mind that is TV shows and movies together, but still, it’s a lot of money.
I’m not even sure whether Disney Studios spends that much on their original (or not-so-original in some case *cough* The Lion King, Aladdin *cough*) content.
According to a new forecast by Dan Salmon, an analyst with BMO Capital Markets, Netflix will spend $17.3 billion on content in 2020.
In 2019, the company spent a total of $15 billion on making their original content, and that’s already a pretty hefty budget.
However, it’s expected to climb up to $26 billion by 2026, and I just think that is insane.
Netflix is spending a lot of money on original content
How can one company afford to spend so much? I now see where our monthly subscription money is going.
Yet, this increased spending isn’t being met with a lot of joy by the shareholders who are worried about the amount of money Netflix is spending.
Netflix’s CEO Reed Hastings and other executives are carrying on with their plan to increase spending on acquiring, producing and marketing content.
The problem is that Netflix is roughly around $13.5 billion in total debt.
They’ve managed to continue funding itself and its incredible spending by selling bonds which has worked so far.
The move has caused concern in some financial quarters about how the company will continue to develop and grow without advertising or other non-subscription revenue streams, especially with all the competition they’re starting to see with the launch of Disney Plus and the upcoming launch of HBO Max.
It’s getting pretty saturated out there and it looks like Netflix’s CEO thinks it’s all going to depend on quality original content, which is why they’re spending so much on it, and I think he’s right.
What do you make of this news? Are you worried by the amount of money Netflix is spending on original content or do you think it’ll result in us getting better TV shows and movies?
Let us know in the comments below.
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