Netflix CFO David Wells tells Variety that the streaming video giant has plans to fill half of its streaming catalog with original content over the next few years. Netflix produces a number of high-quality series and movies, including Stranger Things, Orange is the New Black, Narcos, Unbreakable Kimmy Schmidt, and many more.
“We’ve been on a multiyear transition and evolution toward more of our own content,” said Wells, speaking at Goldman Sachs’ Communacopia conference Tuesday.
Earlier this year, Netflix content head Ted Sarandos said the company expects to offer 600 hours of original content in 2016, up from the 450 hours offered in 2015. The company projects content spending on a profit/loss basis to rise from $5 billion this year to more than $6 billion in 2017.
Netflix will offer a mix of content produced and owned by the streaming giant, as well as co-productions, and content obtained from other producers. Wells says the company is “one-third to halfway” to making the 50% original content goal.
The cost of content production has gone down, while at the same time, the number of bidders for quality content and the amount of that content have increased as well. “You have supply and demand settling out,” he said. “We would love to provide as many of those stories as possible to the consumer,” said Wells.
Netflix is in a spot where it needs to continually attract new subscribers, and bring former subscribers back into the fold. Due to a move by the company to shift all of its U.S. subscribers to its standard monthly plan at $9.99, the company has seen some long-time subscribers cancel their service in the face of the $2 monthly rate increase. This led to a lower-than-expected 160,000 net subscriptions during the second quarter.
Internationally, Netflix’s content split comes in at around 80% Hollywood content and 20% locally produced, in-language programming. Japan is a notable exception, with a 50/50 split between Hollywood and local content.
Wells says the streaming giant has no plans to launch an ad-supported version of the service, ala Hulu, saying, “there’s no immediate plans for an ad-supported product… The Netflix brand stands for no advertising.”