Netflix is reportedly spending $17.3bn on new content in 2020, up from $15.3bn in 2019
NETFLIX ANNOUNCED on January 21st that it reached 167m subscribers at the end of 2019—more than the population of all but seven countries. Yet the company faces fierce competition from new services such as Disney+ and Apple TV+. In a letter to shareholders, the company wrote that, although it has “a big headstart in streaming”, the transition to video-on-demand entertainment is “still in its early stages, leaving ample room for many services to grow”.
In America the effects of such competition have already begun to emerge. In July Netflix’s share pricewhen the company revealed that it had not only missed its target for new subscribers worldwide in the second quarter but had actually lost customers in the United States for the first time in eight years. The company blamed a weak slate of content as well as the increased subscription fees .
Outside its home market, the story is a happier one. Netflix has worked hard to produce original foreign-language content and license established favourites across the world. It has also struck partnerships with successful local production companies, particularly in France, India and South Korea. These efforts have paid off. The company added 8.8m new subscribers worldwide in the fourth quarter, far exceeding its own forecast of 7.6m.
To fend off its challengers, Netflix will have to continue producing hit shows and films, of the kind that earned it 24 Oscar nominations—the highest total of any studio or distributor—earlier this month. These are often launched in the last quarter of the year to catch the holiday season in much of the world, when customers watch more television, and because there are fewer sporting events, blockbusters and network-television finales to compete with. The company is reportedly spending $17.
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