Netflix Has No Regrets Spending $6 Billion On New Content
Netflix has no regrets spending billions for new content. This is according to the streaming service's Chief Financial Officer who defended the spending saying that they need a steady supply of new shows.
According to The Hollywood Reporter, CFO David Wells told Wall Street on Tuesday about the roughly $6 billion Netflix will spend this year on content. This is in addition to the $4.8 billion it has racked up in debt already, which he says is all worth the cost.
Wells believes that the money spent on new shows has helped streaming service get to an estimated 104 million subscribers worldwide. With such a large number of subscribers, the service has no problem monetizing its new projects. However, he did note that they might soon experience budget constraints.
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"We might be to the point where we might start seeing more budget constraint," Wells said. "That has some benefits in terms of helping drive discipline on the content line."
With the likes of Amazon, Facebook, Twitter, Apple and a few others getting into the content game, there are more buyers than ever. However, Wells also noted that the price is only increasing for top tier shows with prices for lower quality ones continuing to stagnate or worse, dropping.
Wells emphasized how Netflix has been thorough on how much it bids on new shows even with its large debt revealing that they have "walked away" on some projects. Although the company is looking to improving its mobile presence, its main focus is still on television screens.
This has been a growing trend in the tech space for quite some time with companies going into heavy debt to acquire market share. Luckily for Netflix, it is still the prime player in the online streaming market and could easily recuperate its expenses provided it maintains its large subscriber base.
