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5 Major Points You Need To Know About Netflix

Netflix is looking to capitalize on its growth potential in the coming year and there are five […]

Netflix is looking to capitalize on its growth potential in the coming year and there are five major areas in which the streaming service giant will be devoting the majority of its focus.

During recent investor meetings, Netflix‘s vice president of finance and investor relations, Spencer Wang, spoke out about his thoughts regarding the future of the company, according to Barron’s Next. Wang delivered five key strategies that Netflix will be pursuing that will be crucial in continuing to differentiate the company and to remain the most popular streaming service in the world.

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#1 Movies

Even though several of Netflix’s original shows such as Stranger Things and House of Cards absorb most of the attention on the Internet, the company plans on remaining committed to making movies.

“Netflix’s belief is that producing Original Movies will be as or more efficient than licensing,” RBC analyst Mark Mahaney wrote.

#2 Critics vs. Viewers

Netflix isn’t going to ditch the critically panned films just because the rating is low. The company’s data has shown that just because a movie is a hit with critics, it doesn’t necessarily translate with viewers.

“Though not necessarily critically acclaimed, Netflix views deals such as the Adam Sandler one as very important given that they drive a great deal of viewing patterns and Netflix’s belief that they don’t want to get too ‘elitist’ with their content,” Mahaney wrote.

#3 Fighting Trends in Japan

Netflix subscribers in Japan have a strong preference for viewing TV shows and movies on DVD. The company has been fighting against the DVD culture in the company and being able to crack into the market will be a crucial focus point for Netflix in the future.

#4 Putting Netflix’s Content Investment Into Perspective

In the company’s latest quarterly filing, Netflix disclosed $15.3 billion in streaming obligations. While the amount is quite high, it’s important to put the amount in perspective so that investors do not get the impression that Netflix is biting off more than it can chew. For example, Netflix believes that Disney’s obligation with ESPN could surpass $50 billion, according to Stifel analyst Scott Devitt.

#5 Cancelling Shows

Traditionally, Netflix would give almost every original show a second season. However, Netflix CEO Reed Hastings says the company needs to be less afraid to cancel a series and instead place more emphasis on finding the diamond in the rough shows like 13 Reasons Why.

“Our hit ratio is way too high right now,” Hastings said while talking to CNBC. “So, we’ve canceled very few showsโ€ฆ I’m always pushing the content team: We have to take more risk, you have to try more crazy things.”

He continued by saying: “You get some winners that are just unbelievable winners, like 13 Reasons Why. It surprised us. It’s a great show, but we didn’t realize just how it would catch on.”