Netflix will spend $8 billion next year on content

Ted Sarandos, chief content officer at Netflix, said his company’s hugely expanded slate of 80 original films for 2018 is about growing hours of engagement on Netflix’s platform.

Speaking today at a UBS investors’ conference, Sarandos said that one-third of all viewing on Netflix is movies.

“People do look to us for movie entertainment,” Sarandos said, pushing back against the idea that movies that don’t receive a theatrical release aren’t really films.

“For most movies, the theatrical release is a lousy experience,” said Sarandos, adding that those movies lose money at a very fast pace.

Sarandos also argued that it would be difficult for anyone to say that Netflix’s upcoming film “The Irishman,” directed by Martin Scorsese and starring Al Pacino and Robert De Niro, is not a film.

Netflix is also increasing its commitment to animated features. The company currently has two in the pipeline and is hoping to do four to five animated features per year. Those films are in addition to the 60 original kids series Netflix is producing.

Looking ahead at long-tail revenue possibilities for Netflix’s film content, Sarandos said it was possible that the company could pursue less-exclusive distribution deals for its movies.

“Right now we find a lot more value in exclusivity than we do in the revenue stream that would come from long-tail licensing,” Sarandos said.

Netflix announced in October that it will spend between $7 billion and $8 billion next year on content.

“We spend disproportionately in the U.S. to generate media and influencer awareness for our programming which we believe, in turn, is an effective way to facilitate word of mouth globally,” the company wrote in a letter to investors.

But Netflix is also growing its focus on international markets. Sarandos said that next year the company will produce 30 local language series in international markets.

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