Netflix is apparently down to spend the big bucks.
CFO David Wells, according to this article by Variety, insinuated that due to Netflix’s 104 million customers worldwide, the economics of Netflix’s model could support a $20 million per hour of content production budget for original TV series.
“Certainly, we can support that level of quality if the [audience] is there,” said Wells, who spoke Tuesday at Goldman Sachs’ Communacopia conference in New York City.
However, Wells was speaking hypothetically, which means that Netflix isn’t shelling out these big sums of money as of right now. Yet, with the growing global network, Netflix is looking to capture billions of global customers.
“Content is becoming more global,” Wells continued. “People are becoming more connected.”
With Netflix set to spend up to $6 billion (and rising!) on content and original productions, much of that spending has been funded by debt. Wells did note that eventually spending on content will hit “diminishing returns,” but for now people should “expect us to invest.”
The $20-million-per-hour figure actually came from Netflix’s CEO Reed Hastings past thoughts on the topic. At the New Yorker’s TechFest conference last fall, Hastings mused about the $10 million per hour production budget of shows like “Game of Thrones” and “The Crown.”
“What we’re all interested in is how do we expand… and figure out what $20 million-an-hour television looks like,” Hastings said at the time.
Either way, Netflix is looking to become the best, and sometimes that takes lots and lots of money.