
Netflix Plans to Spend $7B on Content in 2018 - pgeorgep
https://www.streamingobserver.com/netflix-plans-to-spend-7-billion-on-original-content-in-2018/
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uses
It feels like we're pretty far past the point where there could be a "Spotify
of movies" or TV.

Instead we have streaming companies getting into media and media companies
getting into streaming. Multiple platforms each with their exclusive media
content, each with their exclusive software and streaming protocols. Not
exactly what I had in mind...

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deegles
It was only a matter of time before large scale streaming tech got
commoditized. That was Netflix's moat early on and now it will have to be
their content library. They clearly saw the writing on the wall long ago.

The golden age of streaming is over IMO, now content will be increasingly
divided into their own streaming services. I wish that streaming video were
regulated like radio, with a flat rate per minute that gets paid back to the
license owner. I can dream...

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rayiner
What possible justification is there for that? With radio there was at least
the colorable reason that public goods (limited radio spectrum) were involved.
Here's it's private content streaming from private servers over private wires.

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trothamel
Well, in the US, copyright exists "To promote the progress of science and
useful arts" I can argue that being able to be able to get movies in one place
is certainly useful. Or that it seems reasonable that in exchange for the
unnatural monopoly of copyright, strings can be attached.

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rayiner
All property rights are "unnatural" (animals don't recognize property rights,
only possession). In my view, copyrights are the least unnatural. We grant
property rights in land with few restrictions, yet real property rights are a
greater restriction on freedom than copyrights. A copyrightable work, unlike a
piece of land, is the fruit of someone's labor. Land, in contrast, pre-exists
the owner. And whereas land is a scarce natural resources, the universe of
copyrightable works is unlimited. There is no good reason to attach more
strings to copyright than to real property.

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ProfessorLayton
Staggering costs like these are exactly why Disney is actually in a great
position to start its own streaming service. It is already one of the biggest
media companies in the world, and has ownership of tons of IP beloved
worldwide.

I'm all for competition so I hope both companies succeed, but its pretty
evident that Netflix needed Disney more than Disney needed Netflix.

I'm also all for the democratization of great content thats happening on
YouTube et al.

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pgeorgep
I can't imagine the world where Netflix, Amazon, Disney, and HBO all coexist.

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protomyth
HBO includes Warner Brothers, DC, and a huge catalog. So, I think they
probably have a pretty good shot on their own.

Amazon and Netflix are the wildcards given their smaller original content.

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macspoofing
Netflix is certainly building up it's library. Amazon may decide they don't
care.

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ryanwaggoner
It's amusing watching people complain about how we're headed to a world where
the streaming services are no better than cable TV. Netflix is $10 / month.
Pile on a half dozen services like that, and you're still only around 50-60%
of what the average cable bill in the US is (just over $100 / month). Did you
really think that all these media companies were going to magically shed 90%
of their revenue?

The user experience does kinda suck, but I think Apple TV, Roku, and other
meta-streaming-platforms will solve most of that in the long run. They'll be
the new cable companies, essentially. But I bet you'll get less bundling than
cable has now. Although I constantly see people saying that they _want_
bundling. "I'd love to just pay $100 / month for every tv show, movie, song,
etc. out there..." That's the ultimate bundling :)

Also, for the people who keep saying they want to just pay for a single show,
can't you do that on iTunes and Amazon? Buy a season pass for a show? I
haven't really done this much, so maybe it's outlandishly expensive, or they
have poor coverage of shows people want.

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acchow
> Did you really think that all these media companies were going to magically
> shed 90% of their revenue?

This is exactly what happened with print media. Why is film media immune from
the internet revolution?

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rayiner
The two situations are completely different. With print media, the Internet
showed that the public was willing to forgo an expensive, high-quality product
( _e.g._ the NYT) for a much cheaper, low-quality product ( _e.g._ Buzzfeed).

That hasn't happened in television and film. To the contrary, peoples'
expectations have only gone up. The production value (and production costs!)
of television shows these days is up there with that of movies 10-15 years
ago. Netflix's pivot to original content shows that consumers want high-
budget, high-production-quality original content more than ever.

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puranjay
But then, people feel the need to consume news.

I can easily forego watching a TV series. There are only a couple of "must
watch" TV shows at any given time.

I already have a huge backlog of shows to watch/finish. I honestly don't care
if I never watch a new TV show again

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ryanwaggoner
I don't think this is universal. I bet many people feel a lot more attached to
their favorite shows than to watching the news.

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Aron
Contrast this to HBO's budget which is ~2B$ I believe and they generally cost
15$+\month. Netflix is just getting started in ripping up the old order.

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gutnor
> Netflix is just getting started in ripping up the old order.

Not sure I like the direction the new order is taking, really look more and
more like the old order to me. Before you need to pay for cable packages to
get a random set of channels. The new order is that you pay various providers
offering a random set of exclusive shows. It is still cheaper at the moment
though.

What I'm hoping to see is big streaming network starting to use exclusive
content as currency between themselves to share their catalogs. However, I'm
not sure what would be their differentiator. Netflix is superior to DVD and
the channel delivery mode of cable. However, Netflix vs Hulu vs HBO vs ...
there is not much more to fight than price. Keeping their content exclusive on
the other hand is very easy to sell.

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dave5104
At least with the new order, you can choose to not purchase Netflix or Hulu or
Disney's option. With the old order, it was all or nothing.

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eyeinthepyramid
>With the old order, it was all or nothing.

Not really, HBO was always an add-on. In the new order, Internet access =
basic cable, streaming services = premium channels.

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MediumD
At what point is Netflix no longer considered a technology company? Streaming
the amount of video that they do is definitely a monumental technical
challenge, but if content is the key to their future, it seems like they are
an entertainment company.

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mbesto
This trope of establishing businesses as either "a tech company" or $INDUSTRY
needs to end. You either provide a product or service in a particular
$INDUSTRY and are technology lead, enabled or not. Netflix, Facebook, etc are
"technology lead" businesses. Tech is _not_ an industry, it's a medium in
which a value proposition is delivered.

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simonh
This came up in a thread about banks. Some finance institutions, or at least
their employees, nowadays explicitly talk about themselves as technology
companies that do finance. I had an interviewer at Morgan Stanley say this to
me just last year. I used to work on the Quartz platform at Bank of America.
It's a fantastic technology stack including dev and release tooling,
authentication and security layers, configuration defined infrastructure,
custom GUI and web front end libraries and tons of other really cool state of
the art tech. All the big banks employ many thousands of developers.

A lot of companies are realising that for technology to be a competitive
advantage it has to be more than just off the shelf. Banks are pushed this way
partly due to regulatory pressure - they can't simply outsource their legal
obligations or therefore the technology that implements them. But that's just
an additional pressure pushing them that way. It's certainly not the only one.
Nowadays lots of service companies are going this way.

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noir_lord
There also companies (like the one I moved to recently) that are old,
established SME (small/medium enterprises - more medium in my case) who are in
niches that just aren't large enough for off the shelf to work but not small
enough to do without.

I was talking to my boss the other day and he said that I was pretty modest
compared to some of the programmers he'd dealt with at out sourcing firms over
the years (they tried that first, it didn't end well), I think my response
tickled him "I'm just a negative plumber with a keyboard, if I do my job right
at this end shit doesn't come out the other".

I think the hubris of "We must do world changing things/disrupt everything" to
provide tangible value is a by-product of the hype around the startup scene
and 'entrepreneurs' (that is people who set out to be an entrepreneur first
and figure out at what later).

I've never wanted that, I've only ever wanted to be compensated decently and
work at a job where I can see measurable _value_ in what I do, in my case
that's writing production/factory management software that saves more money
than it costs and makes the life of the end users more pleasant, it's also not
particularly stressful and I go in at 9 and leave at 5 _every day_ with
complete technical freedom and time for that rarest of rare things,
documentation.

After spending the last 5 years in high pressure, insane demand environments
I'm never going back, I'll go do something else before I go back to that, it's
simply not worth it (to me).

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ghostbrainalpha
Netflix has almost 100 Million users. That means they are spending
approximately $70 per user on new Content in 2018.

Netflix costs between $7-$12 per month. Many of those subscribers will not
last the whole year. It is awesome they are spending basically 100% of their
revenue on new content, but this model is not sustainable.

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msmith
Most of the content has a shelf life much longer than one year, so I'm sure
that factors into the equation.

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sanmon3186
Plus good content invites new customers. Netflix has expanded to pretty much
entire world now (China is the only major market with no Netflix). From my
experience in India, they are investing heavily on local content. Existing,
original or licensed, content is not enough for these markets.

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pmoriarty
I'd love to believe that the vast majority of that money will go to the
artists, actors, directors, muscians, and other creatives actually making this
content, but I have a bad feeling it'll just wind up in the pockets of
executives, board members, and stockholders.

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hkarthik
With this kind of spending, they must be planning to monetize beyond the
subscription fees.

Get ready for the ads. Cable was ad-free in the early days too.

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likelynew
I don't know why people think that one can earn billions in online ads so
easily. In my calculation, Netflix can't earn anywhere close to $10 per month
on ads that people are willing to watch.

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jasonkostempski
I'd like to see a DRM-free Netflix Original content only streaming plan. I'd
sign back up and they could really set a good example.

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new299
Not only this, but could they at least enable Netflix original content through
VPN/proxies? (as they've started blocking all access via proxy now).

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uptownfunk
Great we can look forward another half dozen remakes of the life and times of
Pablo Escobar

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le-mark
Anyone have any thoughts in how to get in on the content production game? Go
get a film degree? Because this is really where the future is headed it seems.

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pgeorgep
Start hustling and pushing content on YouTube, Snap, etc. Find a niche that
interests you and just push out massive quantities of content.

What's your goal and what kind of content do you want to make?

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joering2
7B?? Where is it coming from?? If average monthly fee is $19 then you need
333,000,000 paying customers. Or 33,000,000 annul.

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jaf656s
Netflix has 100M+ subscribers, so this doesn't seem like a problem.

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likelynew
It's not a problem if entire revenue is profit, which cannot be farther from
the truth. It's annual profit is lesser than a billion dollar per year and
remain below it for a long time.

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elvirs
buying passes to all 5 top streaming/content services costs $53 which is less
than any cable package costs and give you access to so much content across all
your devices and absutely no ads. amazon $8.25/mo netflix $7.99/mo youtube
$12.99/mo hulu $7.99/mo hbo go $14.99/mo

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jgalt212
That's really not that much money, ESPN spends $1.9B on just one show--Monday
Night Football.

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matwood
Sure, and it's starting to look like that is not sustainable. ESPN just cut
tons of expensive on-air talent. Cord cutting is killing ESPN as they are
getting a very large portion of everyones cable bill.

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digikata
ESPN is a big reason that non-sports watchers cut the cord - why subsidize
costly sports channels for everyone else? If the demographic data is right,
non-sports watchers are a larger proportion of younger demographics.

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shmerl
Aren't they funding The Witcher series?

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puranjay
They'll do far better to spend a bit of that money on improving the content
experience.

I unsubscribed because there is far too much content and I never know what to
watch

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BartSaM
This is really very hard to fix the problem. So you have unsubscribed because
there are too much media to digest available? You must be an extreme minority
with a problem like that.

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xienze
$7B... let's see, with the astronomical amount of money Netflix dumps into
individual projects, that's what, 10 or 12 shows? :)

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overcast
With the quality of content they produce, that's more than enough. They are
headed towards HBO level of production.

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alexanat
Agreed.

To the younger generation I am sure they already are considered equal to or
better than HBO, they are less likely to factor in any legacy content.

