California
18 October 2016
Reporter: Barney Dixon

Own content more profitable, says Netflix


Netflix plans to focus more on self-producing than licensing content from third-party producers and networks in the future, its latest financial results have revealed.

According to its Q3 2016 financial results, Netflix spent an extra $1 billion on its streaming obligations, taking the overall sum to $14.4 billion over the three-month period.

These content obligations included self-produced content titles such as Stranger Things, third-party licensed originals such as Orange is the New Black, and licensed non-originals such as Scandal.

Netflix said in its results: “Over the long run, we believe self-producing is less expensive than licensing a series or film, as we work directly with the creative community and eliminate additional overhead fees.”

The streaming site also underlined the importance of owning the underlying intellectual property, which it said brings benefits in providing global rights, more business and full creative control.

“Combined with the success of our portfolio of originals and the positive impact on our member and revenue growth, we believe this is a wise investment that creates long-term value.”

Netflix finished Q3 with $1.3 billion in cash and equivalents and global streaming revenue exceeded $2 billion for the first time, which it attributed to shows such as Stranger Things and Narcos.

The streaming site also exceeded its membership growth forecasts of 2.3 million and achieved a total of 3.9 million new members, with 3.2 million attributed internationally.

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