Netflix continues to invest billions on its programming, and that is paying off big-time, according to a new Morgan Stanley Alphawise survey.
Netflix is set to spend $US6 billion on content in 2017, more than rival Amazon, which JPMorgan estimates will spend $US4.5 billion, and many times HBO.
Though Netflix doesn’t break out exactly how much of that is going towards its original shows and movies, Netflix’s CFO said last year that the company is moving toward a 50/50 mix of original and licensed content.
What we do know is that Netflix will release a whopping 1,000 hours of original content by the end of this year, which would take you 41 days to binge-watch if you sat down and viewed it straight.
That is a huge bet, and it seems to be working. How well? 33% of respondents to Morgan Stanley’s survey said Netflix had the best original programming of any streaming service or premium TV network. Not just good: “the best.” That’s up from 17% in 2014.
This year, Netflix snagged its first Golden Globe in a major show category when “The Crown” won best drama series. (“Stranger Things” was nominated in the same category.) Netflix is also rolling out new show formats at a rapid clip, from its game-show debut “Ultimate Beastmaster,” to locally-produced shows from regions around the world.
That doesn’t mean everything has been a hit. For instance, Netflix’s latest Marvel series, “Iron Fist,” was trashed by critics.
But still, if Morgan Stanley’s survey is any indication, Netflix’s quality keeps going up and up, even in a “peak TV” world of 455 scripted TV shows in 2016.
Here’s the chart that shows Netflix’s progress since 2014 in the survey:
This trend could be instrumental in driving subscriber growth, as Morgan Stanley found that original programming is rising as one of the top reasons Netflix users subscribe to the service.
This is true especially around marquee original shows that come back every year, according to Netflix management. In January, Netflix CFO David Wells said that the company has found returning shows do a better job of boosting subscriber growth than brand-new ones.
“If they are brand new shows … if they are having to punch into the consciousness of the consumer, they do not tend to draw new subscribers in as great of numbers as some of our existing shows,” Wells said.
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