Netflix already has a massive content budget slated for 2018, but CEO Reed Hastings sees no reason that it won’t keep going up in the future.
Hastings spoke with Business Insider and said there’s no limit on investments for original material. He predicted the budget would keep growing as Netflix keeps growing, adding that investors and consumers both seem to like the huge amounts of content.
The comments align with what Hastings told investors during Netflix’s fourth-quarter earnings call in January, when Netflix confirmed that it’s content budget for 2018 would be $8 billion.
“…It is 8 billion as you’ve pointed out for this year but it will definitely of course be higher in 2019 and 2020. So don’t think of it as 8 billion as some new plateau. Instead it’s just a point in time as we grow both the revenue and our content budget,” Hastings said according to a Seeking Alpha transcript.
Netflix’s content budget has been steadily increasing over the past few years. In 2017 the company spent about $6 billion and in 2016 it spent about $5 billion.
As the content budget continues to grow so too do Netflix’s subscriber totals and revenues.
During the most recent quarter, Netflix brought up its total to 125 million subscribers after adding nearly 2 million new U.S. subscribers and nearly 5.5 million new international subscribers. Netflix’s total $3.7 billion in revenue was up 43%, which the company said was the fastest quarterly rate of growth ever for its streaming business. It attributed the rise to a 25% increase in average paid streaming memberships and a 14% rise in average selling price.