Netflix Will Spend $6 Billion For Content in 2016
Netflix, the video streaming company will spend $6 billion to develop its original content in 2016. The company is aggressively expanding its market to a global level. However, aggessive expansion from Netflix bothers many local streaming services.
The plan was revealed at Television Critics Association's press tour in Pasadena on Sunday morning. Netflix Chief Content Officer Ted Sarandos was speaking in debate of too much TV topic as a part of the press tour. He said that if there is too much TV, then others may have to slowdown, because Netflix has big plans for 2016.
"We're going to spend in 2016 about $5 billion dollars on content on a P&L basis, which means about $6 billion in cash." Sarandos said as quoted by Entertainment Weekly.
'"We are running a global network. One that is not easily comparable either in business or cultural terms … We're not courting advertisers, because we're not targeting a single demographic," he added.
Netflix started in 1998 as a DVD sales and rental delivery service to serve U.S. market, and the company was successful due to its unique positioning. In its website, the Los Gatos-based company developed a video-rating and review system to give a personalized video recommentation for the customers.
In 2007, the Lost Gatos-based company started its video streaming service which accelerated its growth. Starting 2011, Netflix started to develop its own content of original program. One of its first series is the renowed "House of Cards" political drama.
Netflix planned to expand its original content to 600 hours of program in 2016, with focus on children program. Netflix will develop 20 kids series this year, adding to 15 children series which is already in the libraries.
"Families have subscribers with kids in the house, and they tend to be much more engaged," Sarandos told Mashable regarding the plan. "We've had great success with our original content. Given the complexity of children's TV on cable these days, creating and managing our own content is preferential."
Netflix has boasted 70 million members in over 190 countries. The company started the international service since 2010, enabling global viewers to subscribe for its service. However, the company faces a challenge from local streaming service worldwide.
Wall Street Journal reported that many local streaming services are forming an alliance to block Netflix expansion. From Canada's Bell Media and Shomi, France's Canal Plus and Sky, Viaplay in the Nordics, Australian streaming service Stan and Foxtel, together with Lightbox in New Zealand. All of which have held a conversation to prevent further Netflix expansion in their territory.
Netflix and its enormous $6 billion budget to develop content focus on children program will have to go head-to-head with local streaming services worldwide. However, in this battle, viewers will be the ones to determine the winner.