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CFO: Netflix Eying $20 Million Hourly TV Content Spend

12 Sep, 2017 By: Erik Gruenwedel


Netflix CFO David Wells


With more than 100 million global subscribers, including a record 5.2 million new subs in the most-recent fiscal quarter, Netflix could see spending on 60 minutes of TV content reach $20 million, CFO David Wells told an investor group.

Speaking Sept. 12 at the Goldman Sachs 26th Annual Communacopia confab in New York, Wells reiterated recent comments from CCO Ted Sarandos about the SVOD pioneer’s annual content spend approaching $7 billion as the global sub base proliferates.

“We're super excited about the potential for … $20 million an hour television, if you have the [right] numbers of people watching it, we certainly can support that level of [spending],” Wells said.

By comparison, HBO’s “Game of Thrones” costs a reported $10 million per episode. Netflix’s “The Crown” reportedly is the most expensive TV series ever made, with a first season budget of $130 million — slightly ahead of Netflix’s short-lived “The Get Down” at $120 million, according to Time.

Wells said the secular shift to Internet-based entertainment is becoming increasingly a “foregone conclusion” from a business perspective, and helping drive momentum for content spending.

While global access isn’t new, Netflix remains largely a mobile platform in India, Philippines, Thailand and throughout Southeast Asia, where streaming on large TV screens is not as prevalent as in more developed markets.

As a result, Wells said the service is upping access to its proprietary “Open Connect” content delivery network, launched in 2011. It is also focusing efforts on localized content, including spending a reported $300 million on India-centric content to help narrow a reported 5.3-million sub gap with Amazon Prime Video.

Forbes reported Prime Video had 9.5 million subs this year after just six months availability in India.

Of course, Prime Video is a free add-on to the Prime membership that affords users free shipping on myriad merchandise purchases. Notably, Prime Video is spending $75 million on Indian-centric content.

Wells believes Netflix’s first-mover status and brand recognition underscore consumer awareness globally.

“We're more and more confident that the world’s billions of consumers of TV and film entertainment are possible audience members for us,” he said.
 


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