Netflix, set to spend upwards of $8 billion on content in 2018, will have in the neighborhood of 700 original TV shows and movies on the service this year, according to CFO David Wells.
The huge bucket of content is driving up Netflix’s subscriber base, said Wells, speaking Tuesday at the Morgan Stanley Technology, Media & Telecom Conference. The “700-range” figure he cited includes 80 original productions from outside the U.S., such as psychological thriller “Dark” from Germany.
The company’s strategy continues to be, “Let’s continue to add content — it’s working, it’s driving growth,” Wells said.
Asked how much content spending is enough for Netflix, Wells replied that “there’s no magic line where you know exactly where you are” in terms of efficiency.
He also said there’s “no religion” at Netflix about the source of programming, although the company increasingly intends to produce its own content. “People don’t care where the stories come from,” he said. “We’re about having the best content. We don’t necessarily have to do it ourselves.”
Netflix ended 2017 with 117.6 million streaming members worldwide. “There’s more non-members than members of Netflix – that’s our opportunity,” Wells said, citing an estimated 700 million broadband users globally (excluding China).
Wells also discussed Netflix’s boosting its marketing budget. The company told investors last month that it plans to increase marketing spending more than 50% in 2018, from $1.3 billion last year to $2 billion this year.
“We used to think every incremental dollar was best spent on content,” but it’s increasing spending on marketing because “we think marketing is a multiplier on the content spend,” Wells said.
Asked about Netflix’s recent five-year exclusive deal with producer Ryan Murphy, Wells said such pacts are “somewhat rare… We aren’t doing 10 of them, we aren’t doing 20 of them.” The company last summer signed a similarly massive deal with Shonda Rhimes, ABC’s most prominent producer.
Regarding Murphy, “we like the kind of content he creates,” which appeals to audiences not just in the U.S. but globally, Wells said. Murphy’s production company is behind Fox drama “9-1-1” and FX’s “American Crime Story,” “American Horror Story” and “Feud” anthologies.
