Netflix will spend approximately $20 billion on its content library this year, including original content and licensing deals…
Popular streaming service Netflix still holds the number one position in its industry. But, there are plenty of legitimate challengers, including Amazon, Disney Plus, Hulu, and Apple. What’s more, others are coming into the market, like NBC Peacock and HBO Max. So, it’s imperative Netflix continues to offer the best it can to consumers. In order to deliver, Netflix plans to spend big.
2020 Netflix $20 Billion Programming Budget Revealed
Netflix will spend $20 billion over the course of this year, an increase of 5x the figure of its budget just half a decade ago. This, according to its most recent earnings report, where the company discloses its content budget for 2020.
For comparison, Netflix spent $12 billion on programming for 2018, only two years ago. And, a very large increase from its spending in 2015, when it put out $4.5 billion for programming.
Netflix explains that it’s necessity to spend such a whopping amount is due to several factors. These include licensing fees, original content production, and more:
“And of course it’s worth noting that as competition among streaming services continues to rise, the cost for the rights to a show or to produce a new original series go up as well. Bidding wars for content are becoming more normal in television, as show producers have more places than ever to pitch their ideas.”
Netflix has already agreed to pay $500 million for the rights to Seinfeld in 2021. The streaming service grew its subscriber base by 8.8 million in Q4 2019, bringing its total customer base to more than 167 million customers.