Netflix Content Spend Now On Par with Premium Networks

LONDON: Netflix’s annual content spend, which in 2016 amounted to $4.7 billion, is now comparable to a premium channel group or platform, Ampere Analysis reports.

Daniel Gadher, analyst at Ampere Analysis, said: “Netflix’s growth has relied heavily on geographic expansion to date, but, with its global launch, that road has now run out. Increasingly, Netflix is re-engineering as a premium channel play and its content spend, as well as the refinement we are seeing in its content catalog, reflect this. Netflix is clearly re-positioning as a premium channel in a strategy that differs considerably from that of Amazon. This duality of approaches will see the two operations increasingly carve out parallel but separate niches.”

At 60 percent of revenue, this level of spend puts Netflix on a par with premium platform operators like Sky and major national channel groups like ITV and NBC. Netflix’s annual spend is expected to rise to nearly $6 billion in 2017.

Netflix is targeting a 50/50 split between acquired content and original productions. Ampere Analysis forecasts indicate that Netflix will pass the 50 percent mark for original content spend by 2021.