Netflix’s Secret Weapon Is Fueling Its Massive and Fast-Growing Content Budget

Oct 12, 2017  •  Post A Comment

Netflix has a secret weapon in Hollywood’s multibillion-dollar arms race, and that’s the streaming service’s international growth, according to a report published today by Variety. The report cites calculations from MoffettNathanson indicating Netflix is in fifth place in overall spending across film and TV, behind NBCUniversal, Fox, Disney and Time Warner but ahead of CBS, Amazon, Hulu, Facebook and Apple.

“Much has been made of Netflix’s massive and fast-growing content budget, which the company estimates will be $7 [billion] for 2018,” Variety reports, noting that when examining just non-sports TV programming expenses, Netflix is in second place behind only NBCU.

“Yet Netflix’s revenue in the U.S. is still just a fraction of those of its major competitors,” Variety notes. “Even in just the TV business, NBCU, Fox and Disney are each roughly twice Netflix’s size, which allows them to spread that programming expense across a much larger revenue base.”

But Netflix has been able to tap into its international growth, an advantage its competitors, most of whom are more U.S.-skewed, don’t have.

The report notes that Netflix is “by far the fastest-moving company when it comes to globalization: Its international share of streaming revenue was just 10% five years ago, but has risen to 41% in the past year. That balance will continue to shift, since the company’s base of subscribers is greater overseas than in the U.S.”

Your Comment

Email (will not be published)