Netflix has really ramped up its original content production in recent years, debuting movies and TV shows nearly every month. That much production comes with a cost, the streaming service is set to spend about $6 billion to acquire and produce content this year, The Hollywood Reporter shares.
CFO David Wells told Wall Street on Tuesday that Netflix needs the new shows to grow despite its $4.8 billion in debt. He added that while growth is the goal, budget constraints will likely be necessary.
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“You could decide to invest everything and more into content, so we have some discipline reserve for growing operating margin at this point,” Wells explained.
“For a while, we were not budget-constrained, we were project-constrained,” he continued. “We might be to the point where we might start seeing more budget constraint. That has some benefits in terms of helping drive discipline on the content line.”
Wells noted that the spending has helped Netflix grow to around 104 million subscribers worldwide, an important number in a market that’s seeing increased competition in the TV market from services like Amazon and Hulu.
“If you have the numbers of people watching it, we certainly can support that level of quality in terms of TV,” Wells added, noting that the “secular shift to global internet entertainment that is becoming increasingly a foregone conclusion… that’s helping drive the momentum for Netflix.”
Variety reports that Netflix’s spending could rise to $7 billion next year.
Photo Credit: Netflix
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