In 2013, Netflix Chief Content Officer Ted Sarandos encapsulated Netflix’s plan to become a media behemoth with one simple and succinct statement: “The goal is to become HBO faster than HBO can become us.”
Five years later, Netflix’s strategy has paid off big-time. With the company rolling out more original content than any one person can reasonably keep up with, Netflix has arguably supplanted HBO as the go-to media destination for top-tier content. From Stranger Things to any number of premiere stand-up specials, Netflix has a vast and perhaps unrivaled library of compelling original content that spans every genre imaginable.
In turn, Netflix has seen its subscriber base skyrocket in recent years. During the most recent holiday quarter, for example, Netflix added 8.33 million new customers, easily besting even the most optimistic projections from Wall St. analysts.
In turn, Netflix continues to rake in money hand over fist. To this point, Netflix CEO Reed Hastings recently said (via USA Today) that the streaming giant is expecting to earn upwards of $15 billion in revenue in 2018. As a point of reference, Netflix in 2017 generated $11 billion in revenue. If Hastings’ projection pans out, that would represent a solid 36% jump in revenue year over year.
Of course, as Netflix’s revenue swells, so does the amount of money the company spends on content. Just a few months ago, Netflix said it may spend upwards of $8 billion on content in 2018, a figure that includes licensed content and the development and acquisition of originals as well.
As to whether or not Netflix runs the risk of paying too much for content — a valid question given many of the company’s recent high-profile deals — Hastings explained it is, in fact, something the company keeps an eye-on.
“We always worry about overpaying,” Hastings said. “We’re trying to make many bets. Some of our content won’t work, but we’re willing to try.”