While Netflix is certainly aware of increasing competition from services like Amazon Video, Hulu, Sling TV, and more, there’s no doubt they still wear the crown when it comes to streaming.
Netflix had a monster earnings call yesterday, with the stock market agreeing that Netflix, despite a big miss last quarter, absolutely boomed over the past few months.
Most notable, though, from their letter to investors, was the news that they were planning on releasing over 1000 hours of original content in 2017 (read the full letter here, PDF).
“We are now in the fourth year of our original content strategy and are pleased with our progress. In 2017, we intend to release over 1,000 hours of premium original programming, up from over 600 hours this year. The Internet allows us to reach audiences all over the world and, with a growing base of over 86 million members, there’s a large appetite for entertainment and a diversity of tastes to satisfy.”
Netflix also noted that they have intentions to branch into more niche offerings alongside their blockbuster releases in order to appease a wider audience of viewers. A source close to Netflix told us their plan was to focus on specific countries where they want to drive subscriber growth, and make content specifically for those audiences. Certainly an interesting strategy, as content is expensive, but one that will be interesting to watch closely.
A few other interesting notes from the letter include Netflix not intending on jumping into China anytime soon. They’re also VERY aware of the growing competition when it comes to streaming video and more importantly consumer attention. Netflix also believes in a big way that producing original content will remain cheaper than licensing it.
Over the long run, we believe self-producing is less expensive (including cost of capital) than licensing a series or film, as we work directly with the creative community and eliminate additional overhead and fees. In addition, we own the underlying intellectual property, providing us with global rights and more business and creative control. Combined with the success of our portfolio of originals and the positive impact on our member and revenue growth, we believe this is a wise investment that creates long term value.