Hot on the heels of news that Apple has set aside $1 billion for original TV programming over the next year, Netflix revealed on Wednesday that it will spend seven times that amount in 2018.
In a new interview with Variety, Netflix’s chief content officer Ted Sarandos quoted the number of $7 billion, which is up from more than $6 billion in 2017 and $5 billion in 2016. The vast majority of Netflix’s budget is spent on licensed content, but the company is working towards balancing that out with more in-house content over the next couple of years, Sarandos said.
Some analysts and industry insiders are skeptical of the company’s spending habits, arguing its stock is overinflated (it’s soared to more than $170 a share, up from around $50 in early 2014, adjusted for a 2015 stock split). “We’re not spending money we don’t have,” Sarandos counters. “We’re spending revenue.” The company reports its debt load is $4.8 billion, with an additional $15.7 billion in long-term content commitments with studios. “We have one of the low debt levels in the industry,” insists Sarandos.
Using its budget, Netflix has produced some successful regional TV series such as the German show “Dark”. The company hopes to increase that number to up to 100 series in the next couple of years. Netflix is also continuing to push into reality TV programming, with 50 unscripted shows coming to the streaming service next year.
Feature films are already on the company’s radar, with movies such as War Machine and Sandy Wexler having already debuted, and Bright starring Will Smith set for release in December.
For its part, Apple is said to be planning to procure and produce up to 10 original TV shows over the next year as it seeks to make up ground on services such as Netflix and Amazon. The $1 billion budget figure is about half of what Time Warner’s HBO spent on content last year and around the same amount as Amazon spent in 2013, after it announced its own move into original programming.
Apple has already kicked off its original programming schedule with “Planet of the Apps” and “Carpool Karaoke”, although both shows have come in for criticism from reviewers.