Netflix has kept us company during global lockdowns, staying ahead of competitors. Now it is looking to spend nearly $20 billion on video content in the coming year.
The Future of Video Content
Data released by Bankr estimates that Netflix will spend about $19.03 billion on video content. This is not a new direction for investment. In fact, they have been increasing the video content budget annually since 2013. The budget for 2021 will be an increase of about 10% from the $17.3 billion spent in 2020. They have been increasing the budget exponentially over the years. Back in 2013, their video content budget was $2.4 billion which grew by 104.16% in 2015 to $4.9 billion. By 2017, the budget stood at $8.9 billion, a growth of 81.63% from 2015. The 2017 budget grew by 35.28% to $210.04 billion in 2018 and last year the figure was $15.3 billion – a year-on-year increase of 27.07%.
Focus on Original Content
The reason for the ever-growing budget for video content is largely due to Netflix’s focus on producing original content. The year-on-year increase in budget directly correlates to Netflix’s production of original shows and movies. According to the research report, producing Netflix originals requires more cash upfront. Their first original series was all the way back in 2013. Since then, the company has made original content a priority.
As well as the expansion of content, their viewership has increased hugely. Between Q3 2011 and Q3 2020, the volume of Netflix subscribers has increased by 807.67%. The figure jumped from 21.5 million viewers in Q3 2011 to 195.15 million in Q3 2020. Netflix surpassed the 100 million paid subscribers to mark during Q3 2017 when the figure stood at 104.02 million from the previous quarter’s 99.04 million subscribers.
As part of their enlarged budget for original content, there is also a focus on internationalising their content. Specifically, they indicate that they will be spending more of the budget on originals from the Asian market. This is due to the huge success for shows like Korean zombie period thriller “Kingdom” and reality show “Indian Matchmaking”. As such, there has been a growth in global subscribers.