As we all know now, Netflix has spent a TON of money on original programming over the last few years. The streaming service has shelled out to sign top creators to premium contracts, paid top dollar for an impressive array of IP, and given all kinds of money to already-produced projects in order to stream them exclusively. Netflix has consistently lost money in an effort to one day make it back with the vast amount of top-tier programming available on its platform. While that goal remains the same, it looks like the strategy is changing a little bit.
According to a report from The Information, Netflix Chief Content Officer Ted Sarandos told a "substantial" group of film and TV executives that spending needs to be more focused on cost-effective purchases going forward. This will really change the way that original programming gets greenlit from here on out.
Netflix has spent more and more money each year since the company began its work on originals. CNBC reports that the streaming service posted a net cash flow of negative $380 million in the first quarter of 2019. That's about $100 million more than the negative cash flow from the first quarter of 2018. Netflix is losing money, and changes have to be made.
You'll likely still see Netflix move in on existing IPs like The Dark Crystal and The Chronicles of Narnia, as those tend to drive a significant amount of viewers to the site. However, projects like Triple Frontier, the action film that cost $115 million to produce, will probably be few and far between.
Netflix is also about to come face to face with its biggest competition to-date later this year. Disney+ is launching in November with a vast library of in-demand content, with a very affordable price tag that will be cheaper than Netflix. If the current streaming king wants to stay relevant, it will need to adapt to the market.
After learning of the reported changes in spending, The Information reached out to Netflix for comment, and the company denied the report.4comments
“There’s been no change to our content budgets, nor any big shifts in the sorts of projects we’re investing in, or the way we greenlight them,” a spokesperson told The Information.
Should Netflix start spending less on original programming? Let us know in the comments!