Netflix and its binge spending: $17.3 bn on content in 2020

In 2019, the streamer spent little up from $15 bn on content


MUMBAI: Netflix is stubborn with its content spending despite being criticised often for being “irrational”. The streaming firm is sticking to its 'grow now - pay later' strategy. According to a recent estimate, the streamer will invest around $17.3 billion on content in 2020.

In 2019, the streamer spent little up from $15 billion on content. The report by BMO Capital Markets predicts the company is on track to spend $26 billion by 2028. An increase of almost $2 billion indicates that users will not get a chance to lower their screen time from the streaming engine as most of the money is expected to go on originals.

While the popularity of the streaming platform rose with years, the competition has also turned tougher with the entry of other deep-pocket players in the ecosystem. Apple TV+ and Disney+ launch have thrown major challenges on the unofficial streaming king. Moreover, Warner Media’s HBO Max is also going to enter the market in mid 2020.

"Netflix remains the clear leader in the global streaming video, and we believe there is still room to grow as incremental investment points enter the story: continued international growth (particularly India and Japan), improving per subscriber leverage on content spending, and the beginning of long-promised FCF improvements," BMO Capital Markets entertainment analyst Daniel Salmon comments in the research note.

Considerably, among the other competitors, no one is spending extraordinarily big on content like Netflix. Disney said it would spend $1 billion on original programming for Disney Plus and will have nearly $1 billion in operating expenses in FY 20 while WarnerMedia will invest up to $2 billion in HBO Max in 2020. Comcast/NBCUniversal has planned about $2 bn for its streaming service Peacock in the first two years.

"We continue to believe the 'streaming wars' narrative is false and there will be multiple winners in global streaming and thus continue to recommend buying Netflix (NFLX), Amazon (AMZN) and Discovery (DIS) together," the note also adds.

Netflix is upping its India game significantly as the streaming giant is ready to spend Rs 3000 crore (around $418 mn)  on Indian content for this year and the next. Netflix founder and CEO Reed Hastings spoke about the investment during a recent India visit while illustrating the country’s importance in their business.

"We launched in 2016 and we have continued to invest. So we have a lot of content from the United States, the UK and Spain. We are developing our Indian content here,” Hastings said. "This year and next year, we will spend about Rs 3,000 crore developing content and you will start to see a lot of stuff hit the screens," he added.  

The streaming giant is set to report its fourth quarter earnings on 21 January. Netflix reported revenue of $5.24 billion, up 31 per cent year-over-year in the last quarter. 

Latest Reads

Voot to roll-out 4 new originals in a month under SVoD

To lure more users, Viacom18’s over-the-top (OTT) platform — Voot — will roll-out four new Originals under the subscription video-on-demand (SVoD) category on the platform. The launch of these four new Original series will happen anytime within 30 to 45 days.

iWorld Over The Top Services
Kurate Digital Consulting launches in Indian market

Digital consulting company Kurate Digital Consulting has launched in the Indian market. Kurate will focus on growing the Indian market by assisting companies in their digital transformation journey. Companies will now be able to reach out for contemporizing their business models.

iWorld Over The Top Services
The biggest focus area for Hotstar is big scale-big idea-high concept series: Gaurav Banerjee

Streamers in India are now bombarded with ‘original’ content on over-the-top (OTT) platforms. With so many shows, the only way to make a mark is by telling stories that matter and offering narratives in their comfort language.

iWorld Over The Top Services
Hotstar Specials launches 'Special Ops'

MUMBAI: Hotstar Specials, along with Friday Storytellers, is set to launch the biggest spy action thriller of 2020. This fast-paced 8-episode series is based on the role of Indian intelligence in a series of real terror attacks that India faced over the last 19 years. Starting with the 2001 attack...

iWorld Over The Top Services
Disney appoints Bob Chapek as its new CEO; Bob Iger steps down

MUMBAI: The Walt Disney Company's Board of Directors has appointed Bob Chapek as chief executive officer with immediate effective. Chapek most recently served as chairman of Disney Parks, Experiences and Products. Robert A. Iger assumes the role of executive chairman and will direct the Company’s...

iWorld Over The Top Services
Kantar's OTT audience measurement aims to be industry currency

Kantar, in association with VTION, has launched OTT Audience Measurement Insights for audio streaming platforms at a time when a unified third-party measurement is need of the hour. While the video measurement will come up in Q2, both the companies, on the back of the collaboration, aim to fill the...

iWorld Over The Top Services
Delhi, Mumbai largest markets for OTT audio streaming

MUMBAI: There is a strong interplay between radio and OTT audio streaming resulting in what can be called a “Battle for the Ear”, according a study.  The OTT Audience Measurement Insights – a first-of-its-kind, passive, continuous audience measurement service – has been launched by Kantar and VTION...

iWorld Over The Top Services
ALTBalaji management confident of breakeven by April-June 2020

MUMBAI: Ekta Kapoor’s over-the-top platform has managed to solve the OTT revenue question. The ALTBalaji management always spoke of profitability and breaking even rather than cash-burn and tons of investment and it seems that aspiration will soon be achieved.

iWorld Over The Top Services
Hungama Play expands distribution, announces partnership with Skyworth

MUMBAI: Hungama Play, a video on demand platform owned by Hungama Digital Media, announced an expansion of its distribution network by partnering with Skyworth, a Chinese consumer electronics brand. Hungama Play’s multi-lingual and multi-genre library comprising movies, TV shows, kids’ content,...

iWorld Over The Top Services

Sign up for our Newsletter

subscribe for latest stories

* indicates required