Why Netflix Plans To Spend $8 Billion To Make Its Library 50% Original Content

Margins are higher and it protects against the threat of content loss as film companies increasingly try to create a digital walled garden around their own material rather than share it with Netflix. JL

Nick Statt reports in The Verge:

With Disney and other high-profile names increasingly moving content into closed garden ecosystems, Netflix’s future lies in making sure it controls its own destiny, and in ensuring it doesn’t take too big a hit when third-party content owners pull licensing deals.  Anime helps court younger viewers who’ve traditionally consumed Japanese content using piracy. Netflix has a war chest its willing to burn through to own its own TV and film content

Netflix plans to increase the amount of money it spends on developing and producing original television and films next year, to an eye-popping $8 billion. The company has given a ballpark projection near that amount in the past, but Netflix bumped it up during its third-quarter earnings announcement today by an additional $1 billion to make clear to investors and Hollywood both that it plans spends to quite a lot of money to lock down ownership of its own entertainment.

With Disney and other high-profile names increasingly moving content into closed garden ecosystems, Netflix’s future lies in making sure it controls its own destiny, and in ensuring it doesn’t take too big a hit when third-party content owners pull licensing deals out from under its feet. The ultimate goal, reiterated today by Netflix executives, is one the company has laid out before: a library containing 50 percent original TV and film content by the end of next year.

Netflix has a war chest its willing to burn through to own its own TV and film content

On a video call with analysts this afternoon, Chief Content Officer Ted Sarandos clarified that a sizable chunk of that $8 billion will go toward toward producing 30 new anime series and 80 new original films, all slated for release in 2018. While the company has often kept concrete viewership numbers under wraps, Sarandos’ willingness to drop the anime and film metrics is a positive sign that its investments in those areas are going well.

While anime doesn’t win Netflix awards at the Emmys — and the company’s Oscar ambitions remain restricted to the documentary category — investing in animated series and independent films paves the road for future creative partnerships and helps push Netflix toward the 50 percent goal. Amazon Studios’s Manchester by the Sea nabbed two Oscars for its screenplay and Casey Affleck’s performance, suggesting Netflix could soon snag a high-profile award itself. And anime in particular helps court younger viewers who’ve traditionally consumed Japanese content using piracy and, more recently, the streaming service Crunchyroll.

Netflix last month debuted its very first original anime series, the quirky Neo Yokio, with Jaden Smith lending his voice to Vampire Weekend frontman Ezra Koenig’s bizarre blend of Eastern, Western, and online culture. The company has had success bringing Japanese-only productions stateside in the past with generous licensing deals, with shows like Knights of Sidonia and Ajin: Demi-Human finding audiences in English-speaking markets.

Netflix also helped the studio behind those two series, Polygon Pictures, produce a full-length film version of the classic manga Blame! Now, it looks like Netflix wants to get more deeply involved in the original anime game, and Neo Yokio, alongside its live-action adaptation of popular manga and anime series Death Note, is just the beginning.