Netflix Eyes Original Docs, Stand-Up Specials

BEVERLY HILLS: On the heels of the first set of Netflix originals earning 14 Emmy Award nominations, the online entertainment outfit has revealed that it is looking to broaden its original content to include feature documentaries and stand-up comedy specials.

"Netflix has become a big destination for fans of these much loved and often under-distributed genres," said CEO Reed Hastings and CFO David Wells in a letter to investors about the company’s Q2 financials. "We are in the early stages of originals and continue to monitor whether the viewing pattern is enough higher in the first few months to have us amortize at a faster initial rate, and then to continue on a straight-line basis for the remainder of the amortization period. In terms of relative size, of the approximately $3 billion in content library net book value we are amortizing, currently around 5 percent is for originals."

Netflix’s first five originals were largely dramas, with the exception of a few comedies.

In its Q2 results, Netflix revealed that streaming revenue was up 26 percent domestically and 155 percent internationally over the prior year. The company said that it generally expects net additions in the second quarter to be lower than the prior Q2, due to increased net-add seasonality; this period was an exception, thanks to the launch of Arrested Development. "This show already had a strong brand and fan base, generating a small but noticeable bump in membership when we released it," the letter stated. "Other great shows don’t have that noticeable effect in their first season because they are less established."

"In addition to growing members at a faster rate than expected, our outperformance is due to timing shifts on content deals and to a lesser degree just spending less on content than expected," Netflix said. Looking ahead, Netflix projected that it would add 690,000 to 1.49 million subscribers in the U.S. for Q3.

For international, last year’s figures were boosted by the launch in the U.K. and Ireland, so Netflix says that it is "very happy to match in Q2 the net additions of a year ago given we had no new territory launch in the first half of the year."