- Netflix will have roughly 700 new and original TV shows in 2018, the company’s chief financial officer announced at a conference.
- It is expected to spend some $US8 billion this year, mainly on original content.
- Netflix is one of the best performing stocks this year.
Netflix is set to add roughly 700 new original television shows in 2018,Variety’s Todd Spangler reports, citing an announcement by CFO David Wells at the Morgan Stanley Technology, Media & Telecom Conference on Monday.
The streaming service is expected to spend roughly $US8 billion this year, and a large chunk of that cash will go towards growing its inventory of original content. That became evident when earlier in February Netflix signed “Glee” and “American Horror Story” producer Ryan Murphy to a five-year, $US300 million deal.
“The increase in original content, including those 700 shows, is part of the company’s ongoing effort to create and improve its content base for current and future subscribes,” Piper Jaffray analyst Michael Olson told Business Insider.
Olson, who is one of the most bullish Netflix analysts on Wall Street and has a $US319 price target for the stock, said that by making a larger portion of its content original, Netflix is giving itself a competitive advantage because it’s selling “unique content that they can control” and tailor to its subscriber base.
BTIG Research’s Rich Greenfield told Business Insider that “it appears that the investment in programming is driving not only more subscribers, but the ability to raise prices.” Netflix’s subscriber growth has impressed of late, hitting a record 8.3 million in the fourth-quarter of 2017. Additionally, the company raised the price of its standard plan in October by $US1 to $US10.99 a month, and could raise it again later this year.
However, some on Wall Street remain sceptical of the company’s heavy spending. Wedbush Securities analyst Michael Pachter, who is one of the longest running Netflix bears, told Business Insider the company is “not investing prudently,” and even if Murphy has a 50% success rate, it is “still going to lose money.”
Netflix is up 46% this year, and is the top performing FAANG stock by a wide margin.