Netflix forecast to spend $19BN on video content in 2021 | Media Analysis | Business | News | Rapid TV News
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Research from financial comparison site Bankr is predicting that in keeping with its plan to maintain its focus on original content, subscription video-on-demand leader Netflix will spend about $19.03 billion on video content in 2021 an increase of about 10% from a year ago.
Netflix English Multiple Device 17July2020
This compares with a $2.4 billion video content budget in 2013, which grew by 104.16% in 2015 to $4.9 billion. By 2017, the budget stood at $8.9 billion, a growth of 81.63% compared with 2015. The 2017 budget grew by 35.28% to $120.04 billion in 2018 and 2019, the figure stood at $15.3 billion, a growth of 27.07% from the previous year.

In its research Bankr attributed its predictions factors like the company’s focus to produce more original video content as detailed in its third quarter 2020 results which fundamentally noted that producing originals requires” more cash up front. Over the years, Netflix routinely raises debt to fuel content spending on originals,” Bankr observed in its research note. “Since Netflix launched its first original series in 2013, the streaming service has put its original content front and centre with significant budget allocation.”

Since Q3 2013, the number of global Netflix paid subscribers has increased 807.67% from 21.5 million to 195.15 million in Q3 2020. Highlighting the factors that it said will maintain growth of paid users across the globe, Bankr said that the SVOD company was reportedly lining up a higher budget on originals from the Asian market. After successfully producing shows like the Korean zombie period thriller Kingdom and reality series Indian Matchmaking, it said that Netflix would seeks to make a mark in a region witnessing a growth in subscribers and match up the competition.

Bankr’s projection is also based on its observation the fact that Netflix has been recording an increasing number of paid subscribers every quarter and that as it onboarded more users during the pandemic it needed to retain the subscribers. Bankr also believes that with subscriber growth likely to continue, Netflix can take additional revenue and expand its content budget even more. Therefore it says, the more Netflix can reinvest in original shows and movies, the more it retains current users and attracts new paid subscribers.

Additionally, it noted that Netflix has been witnessing a peak in cash burns, proceeds from which are channelled to original content spending as well as general investments, working capital, potential acquisitions and strategic transactions.