In an effort to produce more original content like Stranger Things and House of Cards, Netflix plans on spending a crazy amount of money in the next year.
The streaming service giant revealed in its Q3 earnings report that the company plans on spending $6 billion on content in 2017.
Part of why Netflix the high costs are because the online platforms have to pay more for talent upfront. For example, in a forthcoming series called Maniac, Netflix is paying Hollywood stars Jonah Hill and Emma Stone $350,000 per episode to star. While this amount may seem incredibly high for Netflix to be shelling out for two actors on one series, there are other factors to consider. The actors and creators don't receive the ancillary income they would typically get from syndication, when a series is sold to other networks, according to QZ.
The iconic US sitcom Friends still brings in nearly $1 billion a year in syndication revenue for Warner Bros, even after the show ended 12 years ago. The main stars of the show such as Jennifer Aniston, Courteney Cox, Lisa Kudrow, Matt LeBlanc, Matthew Perry, and David Schwimmer all receive around 2% of the revenue. For those of you not wanting to do the math, that translates to about $20 million per year.
Because Netflix typically retains the rights to all of their original content, the actors and creators don't get their usual cut from syndication income like they would on a regular network series. That being said, paying Emma Stone and Jonah Hill $350k per episode doesn't seem too crazy now does it?
"That's why the checks are so big," Ted Sarandos, Netflix's chief content officer said. "We are negotiating for what the backend would be."
Netflix's plan to invest heavily in all-new original content isn't that surprising to the subscribers given the immense popularity of some of the company's most recent projects. Be sure to check out one of the most highly-anticipated Netflix shows here.
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