Netflix Co-CEO Ted Sarandos said the company will likely spend roughly $17 billion on content in 2024, steady with 2023 levels.
The level of spending, which had shocked the rest of the entertainment industry as it grew sharply during Netflix’s rise, has flattened as the company has reassessed its operations. Along with staff reductions, the company has embarked on revenue-generating initiatives like advertising and charging subscribers fees for sharing passwords and exercising more discipline on spending.
“The rate of growth depends on the rate of revenue growth, for sure,” Sarandos said during the company’s first-quarter earnings interview.
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“We said we’d stay at roughly $17 billion on average in the 2022 to 2024 period,” CFO Spence Neumann reminded interviewer Jessica Reif Ehrlich, a media analyst with Bank of America. “But there’s a big entertainment market to go after beyond that, so as we reaccelerate revenue, we see a lot of opportunity to grow into that viewing and engagement and business opportunity.”
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Sarandos was asked about whether the company will change its film strategy and reconsider its stance on theatrical, with Reif Ehrlich noting recent staff cuts in the film division. Aside from some experiments with broader rollouts, Netflix generally puts films into smaller circuits for a few weeks at most before debuting them on streaming.
“No, Jessica, the film division is doing great,” Sarandos responded. Netflix films winning Oscars last month, among them All Quiet on the Western Front, were “also very, very popular with fans,” he added. “We’re really happy with the investment in film. Of course, we’re trying to improve it, like we do with all of our films, but our release strategy — remember, there are a lot of ways to create and collect demand for a film. Driving folks to a theater is just not our business. We create that demand and we collect that demand on our subscription service.”
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Two tech rivals in streaming, Amazon’s Prime Video and Apple TV+, have both indicated robust commitments to theatrical releases as drivers of streaming titles. Major studios with sibling streamers have also walked back their day-and-date pushes of a year or two ago as moviegoing returns.
“It’s tempting to make the comparison between the services” in the film arena, Sarandos said, but size matters. “The other services don’t have that scale. They don’t have the subscriber base or the revenue base to support a single window that we can support with even big-budget films.”
Netflix’s goal above all is to release films that are “loved and watched,” the exec added.