Netflix CFO Talks Content Spend

Licensed shows, live and gaming are all key growth areas for Netflix, according to CFO Spencer Neumann, with its $18 billion annual content expenditure “not anywhere near a ceiling.”

Neumann made the comments in conversation with Benjamin Swinburne at the Morgan Stanley Technology, Media & Telecom Conference.

Addressing the moves the company has made over the last few years to drive growth, Neumann highlighted the crucial role of the crackdown on account sharing and the introduction of the advertising tier. “We believe we’ll deliver critical ad membership scale in all of our 12 ads markets in 2025 and then move on to further improving the monetization of all of that inventory,” he said. “We’re most focused on continuing to improve our service all the time across all aspects of Netflix. The competition is improving as well. The key for us is improving faster than the competition, and then we can drive that growth flywheel of more and better entertainment and deliver more engagement, more revenue and more profit.”

Discussing the addressable TV market, Neumann noted that although the platform has some 300 million paying members and reaches about 700 million people when factoring in household members, “we’re in about 40 percent roughly of the connected TV households around the world, and that’s a connected TV universe that continues to grow. We’re capturing about 6 percent of our addressable revenue market, and we’re less than 10 percent TV view share, again, in every major country in which we operate. We want to deliver more and more entertainment value around the world. We can grow into more members. We have pricing and plan evolution over time. We’re getting more sophisticated there. We have the third lever of advertising. We think we can drive healthy revenue and profit growth as we continue to  control our expenses to be growing slower than revenue for many, many years to come.”

On allocating content expenditure, Neumann said, “It’s always continuous improvement, how we best allocate our content dollars for the highest impact with the existing dollars and then the next billion, if you will. It’s across this huge variety and quality of content. We’re trying to optimize across English-language scripted TV and film, unscripted TV, documentaries, docuseries, animation and anime increasingly now. We also have games content as well. We’re producing in more than 50 countries around the world. How do we optimize that spend for highest member impact? We get smarter at that every year.”

Neumann continued, “We see opportunity to grow everywhere. We want to stay in growth mode versus maintenance mode for as long as possible—healthy growth mode. You see that in terms of that we’re leaning into this year in 2025. When we talk about our 2025 slate, even English-language scripted TV, which is one of our most mature areas in some ways in terms of original content, that category is growing. License content is growing. We still see impactful opportunities to secure licensed content from our partners in a way that’s a win for them and a win for us. We’re growing live. We’re just starting to build out our live offering in the U.S. And then hopefully, there’s a long runway from there. In terms of non-English or just content originating from countries across EMEA, AsiaPac and LatAm, those are all in varying degrees of maturity and [there is] lots of growth. We continue to lean into that at a pretty healthy clip.”

Neumann went on to discuss Netflix’s global scale, producing across 50 territories. Bela Bajaria, chief content officer, “talks about this a lot: those stories have to start with big local impact. There has to be authentic storytelling. Authentic stories with big impact are great with subtitles and dubs. They can occasionally travel across countries or regions. The exceptional ones travel and become the global hits like a Squid Game or Society of the Snow or Lupin. It starts with having amazing creative executives in all these countries around the world. Bela has leaned into the strategy of authentic storytelling, local first. You overlay that a culture of distributed decision-making and transparency and a focus on continuous improvement. It’s a combination of art and science, structure and systems that allows us, we believe, to deliver a variety and quality at scale and keep building on improving on it.”