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Businesses The Almighty Buck Entertainment

Netflix CEO: Why Even $8 Billion Investment in Content Isn't Enough (axios.com) 93

Netflix expects to spend about $8 billion on content this year. For Hollywood studios, that's a reasonable figure. But for Netflix CEO Reed Hastings, it's not enough. From a report: The company is competing against a range of traditional entertainment companies around the globe, and of course, against the need to work, sleep and do other things. Speaking at TED in Vancouver, Hastings noted that $8 billion is about what Disney spends. "That's spread globally," he said. "It's not as much as it sounds." Hastings noted that House of Cards wasn't really the company's first effort at original content. It had tried back in the days when it was still mailing out DVDs. "It didn't work out because we were sub-scale," he said.

Netflix CEO: Why Even $8 Billion Investment in Content Isn't Enough

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  • by Anonymous Coward

    How much do HBO invest because they've consistently produced watchable "content". Netflix, Disney... not really.

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Oh, come on. What about "Altered Carbon", to name thing? Disney, to my dismay, managed to produce the most disappointing Star Wars movie to date.

      • Maybe but you went and saw it anyway. And will go see the next one.
          The Mouse doesn't care he just wants your money.

        • Saw Star Wars 24 times in theaters. Own it.

          TLJ saw once. Do not own it.

          Will not see Solo.

          Will not see 9.

          It's not female/male. I like Ahsoka and Jen.

          Kennedy is just toxic. As is Johnson.

          Star wars 7-9 should have finished the story instead of rebooting it and making 1-6 pointless.

    • by Anonymous Coward

      The valuation is insane and the service has gotten worse. This is not a company built to last.

    • Re:Not the money (Score:4, Interesting)

      by quantaman ( 517394 ) on Sunday April 15, 2018 @08:23PM (#56443347)

      How much do HBO invest because they've consistently produced watchable "content". Netflix, Disney... not really.

      I don't know though their revenue is about $2 billion.

      Note that HBO and Netflix have very different models, HBO is an add-on to an existing cable package. They aren't looking for mildly watchable content that's just good enough to temporarily distract you from the existential horror of your life after you finish dinner, they need to produce really high quality content so people who already have TV with a bunch of watchable content will go out of their way to purchase HBO with those awesome shows they want to see.

      So they don't want 20 decent shows, they just need 5 or 6 great shows.

      Netflix doesn't need amazing content, if people really needs something special they'll get HBO Go or go out to a movie. Netflix needs to make sure you never get bored, open your guide, and can't find anything interesting to watch.

      • by Kiuas ( 1084567 )

        Note that HBO and Netflix have very different models, HBO is an add-on to an existing cable package

        This is only partially true, and even then mostly in the US as far as I can tell. Here in the Nordics the majority of people who watch HBO content (myself included) do it through their streaming service HBO Nordic , their localized streaming service with a price point of 10 euros a month, essentially a direct competitor to Netflix. They also release plenty of stuff there that they've not produced themselves li

      • If that's true, Netflix must have either terrible content, or is in need of a UI change to surface the good stuff. For whatever reason, it's hard to find something good to watch on Netflix. The exception is if there's a new series of HoC, ST, BB, or whatever the series-du-jour happens to be.

        Contrast to Amazon - they seems to surface good-enough stuff all the time (and stuff you don't have to pay again to watch).

    • How much do HBO invest because they've consistently produced watchable "content". Netflix, Disney... not really.

      Yeah, how much you actually spend on the thing has no direct relationship with how much money it makes. (See: Cutthroat Island, any one of the many enjoyable B-movies.) What you want is to spend the money well, on things people will actually want to see--throwing more money at a bad project will not actually help anything, unless the only thing that is wrong is it being painfully obvious that the budget for some key element is in the "~$5 found in a couch" region.

  • If Netflix (Score:3, Insightful)

    by bobstreo ( 1320787 ) on Sunday April 15, 2018 @08:06PM (#56443293)

    would forget about Adam Sandler and swear to never create any content with Musical Contests, Batchelor* shows, or "deep hitting" news stories, they can save money and grow viewership.

    • Re:If Netflix (Score:5, Insightful)

      by JDeane ( 1402533 ) on Sunday April 15, 2018 @10:24PM (#56443771) Journal

      About to cancel my subscription to Netflix and probably not for the reason or reasons most would...

      It's that damned auto play preview music and video clip every show plays if you move just so much as look at a picture for a moment...

      For like the first 10 minutes I thought it was cool, then I got mildly annoyed with it, then I looked for a way to turn it off.. Now I signed up for Direct TV Now and Amazon and maybe I will switch to Hulu... But really Netflix needs to have that optional.

      • It is ridiculous that the user has absolutely zero control over the interface.
        • by JDeane ( 1402533 )

          I agree.... 3rd party theme's would be awesome on Netflix also maybe 3rd party category tools/filters so you could install "Action Movie Extreme!!!" as a category and "Happy Halloween Super Slasher Flicks!!!"

          The theme thing would be nice if I could just get a simple hack to disable that one "feature", and it's not about data usage for me. Although I have heard people complaining that it chews up data unnecessarily, so if your on a phone or your ISP has data caps it can cost money.

          Give people a little of wha

          • I agree.... 3rd party theme's would be awesome on Netflix also maybe 3rd party category tools/filters so you could install "Action Movie Extreme!!!" as a category and "Happy Halloween Super Slasher Flicks!!!"

            The theme thing would be nice if I could just get a simple hack to disable that one "feature", and it's not about data usage for me. Although I have heard people complaining that it chews up data unnecessarily, so if your on a phone or your ISP has data caps it can cost money.

            Give people a little of what they want and at a decent price is the best way to prevent piracy. Also listening to your customers is business 101 :(

            There are some 3rd party interfaces,

            Here's the one I usually check with:

            http://instantwatcher.com/ [instantwatcher.com]

            Way easier to search than clicking on my android tv's remote].

            It was better before Netflix made their knee jerk Amy Schume "let's not have actual numeric ratings" change...

      • sticking with Netflix for now but a lot of the ways Netflix work piss me off hugely. The biggest issue is the changing categories for me, I have a set of favourite genres and categories, these for me should always be there. LET ME FUCKING SET THEM to always be their in the order I want. The lack of control over the interface really sucks.
        • by JDeane ( 1402533 )

          I hear you.... Netflix should be more configurable to what the user wants... What you said has gotten worse lately too, I mean it's always been kind of annoying in that respect but less and less of what I would watch shows up and then I en up digging for an hour looking for something to watch and then I get smacked in the face with my complaint :(

          • They do bubble up content I want sort of want to watch but it does seem difficult to find new things. Also...pegging someone to a genre is only half the picture. I am interested in finding new things that are in line with the reasons I watch a particular genre. For instance, I require well developed characters, plots, and stories that are believable if not a bit outlandish or novel. There are core reasons people watch certain types of shows. They should try to hinge everything on genre.

        • What I've noticed is, since the yes/no change from 5 stars, is that the A.I. seems *very* shallow.

          You watch one thing in a new category and like it and it seems to forget everything you liked before. I have to watch something in my history to fix it.

          I didn't used to be this forgetful.

          My interface doesn't play a preview. Sounds annoying tho.

          • If it's a Netflix Original, chances are Netflix will rate it 93 to 98% recommended, whereas something that should be 100% recommended to me (based on my viewing habits), like Badlands, doesn't even show up in the interface, I have to chance upon it in YouTube TV, then look it up on the Roku, and see that Season 1 is on Netflix, and it's only 60% recommended.

            • Spot on. I am surprised they are not focusing on this aspect of the experience as the sole driver. I do not want to browse for content. I have a remote for a Roku TV in my hand and I want Netflix to know what I want to watch. They are doing a decent job...but it should be off-the-hook awesome instead of adequate.

      • by lucm ( 889690 )

        About to cancel my subscription to Netflix and probably not for the reason or reasons most would...

        It is annoying, and another lame thing that they started doing is having weekly episodes. If I wanted to wait a week to watch more episodes of a show I'd go to HBO or AMC. They're losing their identity and value. It's like a cheap buffet that suddenly makes you order their shit a la carte, just taking away the quantity and the waste culture and not replacing it with quality.

      • by Deagol ( 323173 )

        Yeah, I un-subbed after YEARS (since the first DVD delivery days) of being a loyal subscriber for this very reason.

        It's so awful that I'll sub for the months when House of Cards (won't now since Spacey got kicked) and Stranger Things drop to give my support, then I'll download/torrent the entire show to watch on my Plex server.

        If they just let me disable that horrible feature, I'd willingly let my $10/month sub go on indefinitely.

        Screw that UI designers at Netflix.

        • by JDeane ( 1402533 )

          I even pay extra for the ultra HD streams but it's just got to the point I can't use it.. with out getting angry... so I don't watch it, and at that point why pay for something I am not watching?

    • Re:If Netflix (Score:4, Insightful)

      by bloodhawk ( 813939 ) on Sunday April 15, 2018 @11:03PM (#56443907)
      I think the problem is these crappy reality shows are relatively cheap to put on, you don't need to pay the contestants and the prizes are generally a fraction of what real actors/script writers etc etc would cost. I saw a recent article claiming it was at a minimum double the cost for series episode and that is for the cheap less successful ones where they don't have to pay the talent as much.
      • by tlhIngan ( 30335 )

        I think the problem is these crappy reality shows are relatively cheap to put on, you don't need to pay the contestants and the prizes are generally a fraction of what real actors/script writers etc etc would cost. I saw a recent article claiming it was at a minimum double the cost for series episode and that is for the cheap less successful ones where they don't have to pay the talent as much.

        True. It costs a lot less to produce a reality show - no writers and cheap actors (sorry, participants) and such ma

  • Too bad (Score:3, Interesting)

    by Anonymous Coward on Sunday April 15, 2018 @08:09PM (#56443307)

    Their shows are shit. That's a lotta change to dump into the toilet.

    • by Anonymous Coward

      Speak for yourself. I noticed that recently of all content i pick from netflix, about two thirds is a 'netflix original' production, and that number only goes up.

      Now i do agree that part of the reason that number goes up is because the amount of movies get reduced over time. Then again, we are more series watchers than movie watchers.

      And guess what. I don't f*g care, as long i like it. And yes, i do like netflix' style. With good plots, not overly predictable story lines, reasonable acting qualities etc. If

    • by lucm ( 889690 )

      There's pros and cons. What I enjoy about Netflix is not feeling bad about not finishing movies and not having to press pause when I go to take a piss. There's value in the bulk and the dollar bin entertainment segment.

      I appreciate good original content but I don't think they can compete in that sphere. They should stick on providing terabytes of B movies and old series. I'm sure for the price of one Bright they could buy the entire Nash Bridges, Boston Legal and NYPD Blue series, and that would be a lot mo

    • Re:Too bad (Score:5, Insightful)

      by AmiMoJo ( 196126 ) <mojoNO@SPAMworld3.net> on Monday April 16, 2018 @05:22AM (#56444709) Homepage Journal

      You can always find someone who thinks everything is shit, but actually Netflix has produced some really good stuff over the years.

      Some of the Marvel stuff is great. Jessica Jones season 1 was some of the best TV of the last decade. Daredevil was pretty good, even The Punisher was quite enjoyable. Shame The Defenders sucked.

      Other stuff generally regarded as very good:

      - The Crown
      - Stranger Things
      - Black Mirror
      - Star Trek Discovery
      - Altered Carbon
      - House of Cards
      - The Foreigner
      - Better Call Saul
      - Making a Murderer
      - Orphan Black
      - The Expanse
      - Sense8
      - Master of None
      - Glow

      There is a lot more, especially if you don't mind subtitles.

      • by jabuzz ( 182671 )

        I have never watched the Netflix House of Cards, but describing this as "Netflix Original Content" is fricking disingenuous.

        https://en.wikipedia.org/wiki/... [wikipedia.org]

        Yep it is merely a US adaptation of a highly acclaimed preexisting UK series. Original my ass.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          UK series: 4 episodes
          US series: 65 episodes

          The "Netflix original content" branding means Netflix produced it (paid for at least part of the filming), not that they wrote the story. Under your definition, they couldn't claim Longmire or Altered Carbon since they were originally books and Longmire is extra seasons of a show that started on A&E, Making a Murderer since it's a documentary, Better Call Saul since it's a spin off of an AMC show, etc.

      • I agree that Better Call Saul and Stranger Things are great Netflix shows, but The Expanse is actually a great Syfy show. Not sure where you got that one from.
        • by AmiMoJo ( 196126 )

          It's on Netflix's original shows page. I think it's like Discovery, a joint effort where if you watch it on Netflix you get the Netflix logo instead of the sci-fi one.

  • DVD (Score:5, Informative)

    by markdavis ( 642305 ) on Sunday April 15, 2018 @08:13PM (#56443317)

    >It had tried back in the days when it was still mailing out DVDs

    Um, newsflash. The DVD/Bluray service has never ended. It is still quite popular, and the ONLY way to go if you want any choice in movies from Netflix (or if you have little or metered Internet).

    "Iconic since 1998. Celebrate 20 years of movies in your mailbox with behind-the-scenes videos, great movie recommendations, fun trivia, and the chance to win." http://dvd.netflix.com/ [netflix.com]

    • Re: (Score:3, Informative)

      by Anonymous Coward

      and the ONLY way to go if you want any choice in movies from Netflix

      Yes - posted also in an AC thread but estimates are the DVD service has 100000 movies v. about 5600 for the streaming service. That's not even to mention the dvd services gets new titles sooner.

  • No one wants to hunt content on different services and maintain multiple subscriptions. This is arguably even worse than pay channels on cable, since as awful as that is, at least it's all on one bill. Rather than serving the customer something palatable, piracy still wins for content accessibility and ease of use. As it gets more difficult, people won't be looking for legal options, but for alternatives to TV all together.

    Why is it so difficult to address the clear conflict of interest between delivery and

    • by Uberbah ( 647458 )

      But it's all 100% on demand with 0% ads. So even if you're right, Netflix does cable far better than cable companies do.

  • by UnknownSoldier ( 67820 ) on Sunday April 15, 2018 @08:47PM (#56443425)

    The astute reader may notice that Netflix carries less and less network shows / movies and continues to push "Netflix Originals" -- all in an order to minimize a key expense.

    What expense?

    One of the secrets of the cable / streaming industry is that license costs continue to go up. In turn this gets passed onto the consumer.

    So when Netflix says Disney spends $8 Billion --- is that to _produce_ content or to _license_ content? And is that ALL media such as TV Shows AND Movies, or strictly JUST TV shows? And is that JUST Disney or does that include ALL of its subsidiaries ?

    Content cost are spiraling out of control.
    i.e. The ten episodes of the first season of Westworld were reportedly produced on a budget of approximately $100 million.

    Assuming that the $8 Billion Disney spends is solely to create content for TV shows -- that might seem like is a drop in the bucket compared to the budget of a few "blockbuster" movies. Here is a list of All the Disney films [d23.com] -- and here is a snippet of 2017 / 2018 movies:

    719. 2017 Dangal (Disney India)
    720. 2017 Beauty and the Beast (PG)
    721. 2017 Born in China (Disneynature) (G)
    722. 2017 Guardians of the Galaxy, Vol. 2 (Marvel) (PG-13)
    723. 2017 Pirates of the Caribbean: Dead Men Tell No Tales (PG-13)
    724. 2017 Cars 3 (Pixar) (G)
    725. 2017 Jagga Jasoos (Disney India)
    726. 2017 Thor: Ragnarok (Marvel) (PG-13)
    727. 2017 Coco (Pixar) (PG)
    728. 2017 Star Wars: The Last Jedi (Lucasfilm) (PG-13)
    729. 2018 Black Panther (Marvel) (PG-13)
    730. 2018 A Wrinkle in Time (PG)

    Let's actually tally the budget -- assuming Disney foot the bill for all of its 2017 movies ...

    * Dangal, $11 million USD
    * Beauty and the Beast, budget $160 million USD
    * Guardians of the Galaxy, Vol. 2, budget $200 million USD
    * Pirates of the Caribbean: Dead Men Tell No Tales, budget $230 million
    * Cars 3, budget $175 million USD
    * Thor: Ragnarok, budget $180 million USD
    * Coco, budget ???
    * Star Wars: The Last Jedi, budget $200 million USD
    * Black Panther, budget $200 million USD
    * A Wrinkle in Time, budget $100 million USD

    ... so around $1,156 million for Movies in 2017.

    Ergo it looks like $8 Billion was for BOTH movies AND TV Shows.

    What's really stupid is that the cable industry STILL relies on the inaccurate, archaic Nielsen ratings. Via the STB / DVR boxes they already have (relatively) accurate metrics of what people are watching but for some reason continue to use an idiotic Nielsen rating to bargain licensing costs -- because they aren't in the content creation business -- only the content licensing business.

    Since Netflix is in the process of migrating from strictly licensing content to producing content this $8 Billion figure shouldn't be a surprise.

    What I DO find surprising is that since Netflix can tell _exactly_ which shows are popular -- one would think they would use this "hard data" to lower licensing costs to carry multiple network shows. Instead we get few and fewer selections each year it seems. Has anyone tracked the quantity of content available on Netflix over the years?

    • Netflix's number of movies has gone down by thousands of titles since 2010 — but its TV catalog size has soared [businessinsider.com]

      In 2010, Netflix had 530 TV shows and 6,755 movies, according to Flixable. Today, the number of TV shows has nearly tripled, to 1,569, and the number of movies offered has decreased to 4,010.

      Additionally and anecdotally, Netflix has lost almost all the Martial Arts movies I've previously watched, or had planned to watch.

    • Netflix has no other choice, it's not the expense of content. The deal is, Netflix can only present what it is POSSIBLE to buy.

      Take Disney for example. Past a certain date, Disney content will leave Netflix. It's not that it has grown too expensive, Disney is just telling Netflix that content cannot be had at ANY price, because Disney wants people to use it's own streaming service.

      The fact that Netflix is not ONLY Netflix only programming at this point, is actually kind of a minor miracle.

      Luckily for me

    • Netflix is not the only party at the table. The people they buy the licenses from are increasing the prices and shorten the duration. That is even for older shows.so paying for them wpuld ne a loss.
      Many shows are also sold as a bundle, soif one popular show is removed, several unpopular ones are as well.
      It is the studios a well that push Netflix to make more content, not Netflix alone.

  • I don't have a huge issue with the service, my girl uses it and it is pretty simple and reliable.

    I will say, I wish the darn comedy section could be split up from
    Comedy : standup
    Comedy : TV shows
    Comedy : Indian Bollywood stuff.

    Don't get me wrong, the occasionally Bollywood video is actually fun, as is stand up, but for goodness sakes they're so mashed together.

    Also be nice to just have a Kodi style filter
    Movie, over 6 IMDB, less than 10 years old, action / adventure / crime / thriller, etc

    • Same for me, but I would add proper fantasy and science-fiction categories. I don't know why people are putting those together.

  • They need to focus on quality content and not just throw money at every liberal extremist with a bad idea for a movie or show.
  • Even in my specific preferred Genre's.

    I'm years behind. I fall more hours behind every week.

    I've been retired six years.

    I don't see how this glut is sustainable at high price levels.

    I long ago shifted most of my consumption down the price curve since I was behind anyway.

    I could not consume the available categories of entertainment I like if I started when I woke up and watched all day every day (and good lord I did a lot of that when I first retired).

    And there are many categories I don't even have an inter

  • 10 show seasons are NOT enough.
  • I have a list pushing 700 titles of feature films/documentaries that I've viewed over the years (which I started to fill out retrospectively about six years ago, as it became harder and harder to sift the seen from the unseen).

    And I have another list of 400 titles with decent critical regard that I have yet to see (few unseen epics remain, but the list is not terrible).

    My local library has about 80% titles on DVD and my local video store (20,000 item catalogue) has another 19.5% (long may it thrive). Total

The best defense against logic is ignorance.

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