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Netflix CEO Reed Hastings and CFO David Wells defended a recent price hike for subscribers on the streaming service, pointing to an increase in content and value that comes at an additional cost: the issue is that with increased content, Netflix has to charge a fair offering that matches the value of the company. “Price is all relative to value,” Hastings said. “We’re continuing to increase the content offering and we’re seeing that reflected in viewing around the world.” Netflix gained 5.3M global subs in Q3 and will release 80 films in 2018.
Hastings said that Netflix is going to “take the spending up next year,” by growing its leadership team and expanding content. In the company’s third quarter shareholder letter, company executives confirmed they would spend between $7 and $8 billion on content alone. To put that into perspective, Netflix spent approximately $6 billion on original content in 2016 and is expected to spend close to $7 billion in 2017. That’s an increase of $1 billion that will go to licensing exclusive series and developing more original content.
Hastings said that Netflix is going to “take the spending up next year,” by growing its leadership team and expanding content. In the company’s third quarter shareholder letter, company executives confirmed they would spend between $7 and $8 billion on content alone. To put that into perspective, Netflix spent approximately $6 billion on original content in 2016 and is expected to spend close to $7 billion in 2017. That’s an increase of $1 billion that will go to licensing exclusive series and developing more original content.