Spending on original content
Netflix (NFLX) added 7.0 million subscribers in the third quarter, beating its forecast of 5.0 million subscribers and helping it to report better-than-expected revenue and earnings. Its paid net additions were 6.07 million in the third quarter, which also exceeded its expectations of 5.15 million net subscriber additions.
Investment in movies and films
Netflix’s thriller Bird Box was watched by 45 million subscribers worldwide during its first seven days on the service. Another movie the company released in December, Roma, was declared 2018’s best movie by the New York Film Critics Circle. The movie was also given the Golden Lion Award. It’s now seeking to work with renowned Hollywood directors such as Martin Scorsese, Dee Rees, Steven Soderbergh, Guillermo del Toro, Michael Bay, and Noah Baumbach to expand its reach as a major studio.
According to sources, Netflix is planning to produce 90 movies per year, of which 20 will be originals, with budgets ranging from $20 million to $200 million. It’s expected to release ~35 films per year with budgets of under $20 million. In comparison, Comcast’s (CMCSA) Universal Pictures reportedly produces ~30 movies per year.
Netflix to grow in international markets
Netflix also has plans to expand its presence in global markets, including in Mexico, Spain, Italy, Germany, Brazil, France, Turkey, and the Middle East. In India (INDA), Netflix is planning to release 12 local language original series and 20 local language films in 2019. In Africa, Netflix has already entered Nigeria after purchasing the rights to the series Lionheart.
The streaming giant added ~5.87 million streaming members in international markets in the third quarter, exceeding its estimate of 4.35 million members. In the fourth quarter, the company expects to have added 7.60 million subscribers internationally.