Recently Netflix has been spending crazy amounts of money on content. In 2017 it is reported that it will spend $6,000,000,000 on new content alone with 2018 looking to have similar spending.
Now we get our first hint that in the future Netflix may slow down its spending.
Netflix CFO David Wells spoke today at a Goldman Sachs investor conference and said Netflix could possibly become more budget constrained in the future; however, as long the company is able to grow the top-line and operating margin, it will continue to invest in content.
So what does that mean? It looks like Netflix plans to keep spending as much as it can, but this could be a hint that funds are getting tighter so it may cut back soon.
“If there’s more competition for top-tier content, we may end up producing one less show,” Wells said.
Procuring content is expensive, but the payoff for Netflix is huge. In a day and age with content providers not willing to give Netflix content, having its own means it will always have a back catalog of shows for people to watch.
The question now is how long can Netflix keep up this rapid growth of new content. Will Netflix need to slow down the speed it is making content?
For now this is our first hint that Netflix may be considering a slight slowdown. May be making one less show a year or a few less could save them millions if money is tight.
For now I wouldn’t worry about this as a cord cutter. I would just keep an eye on it for possible changes from Netflix in the future.
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