In 2017, Netflix (NFLX) plans to stick to the script it has always relied on—putting growth before profits. However, unlike past years, this year’s content should be more at the center of Netflix’s growth efforts. Over the past few years, Netflix’s growth largely came from expansion into new geographic markets, which has seen the service launch in nearly every country and territory in the world.
Growth this year is expected to focus on appealing to subscribers with quality content. Netflix wants to expand its video library with original movies and it is planning to spend $6 billion on content in 2017. The company spent $5 billion on content last year, which helped the streaming company grow its subscriber base significantly.
Netflix (NFLX) ended 2016 with 93.8 million subscribers, up from 74.8 million subscribers at the end of 2015. Netflix added more than 7 million subscribers in 4Q16 and for 1Q17, it is seeking to add 5.2 million customers.
What kind of content drives subscriber growth?
Netflix’s content acquisition has recently focused on unscripted and stand-up comedy shows. The company’s head of entertainment, Ted Sarandos, recently said that the signing of comedians Jerry Seinfeld, Chris Rock, and Dave Chappelle would help drive subscriber gains.
Netflix is likely set to face increased competition for subscribers this year from Amazon’s (AMZN) Prime Video, Sling TV by Dish Network (DISH), DIRECTV Now by AT&T (T), PlayStation Vue by Sony (SNE), and YouTube Red by Alphabet (GOOGL).