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Netflix, Inc. (NFLX) Mining Global Markets for Rare Original Content

Netflix Inc (NASDAQ:NFLX)

Netflix, Inc. is thinking more about moving away from being served by traditional movie production firms. The firm  is working on ways to produce more of its own original features. This is the new direction for the firm as revealed by CEO Reed Hastings at the DealBook conference a couple of days ago.

Two of the new original programs Netflix wants to roll out soon are Bollywood and anime-style shows. Netflix is probably looking to serve foreign markets of India and Japan, though Bollywood and Anime have fans worldwide, with the proposed shows.

Netflix’ push for original content waters down the plan by Time Warner to pull back on licenses to digital services such Netflix. Time Warner’s CEO, Jeff Bewkes, says his firm is prepared to stop selling its best stuff to firms such as Netflix to prevent a further use of its original shows to build another firm’s business and brand.

Netflix plans to keep rolling

Netflix has recorded a number of successes with its own features. Hits like ‘’Narcos,’’ based on the rise of drug lord Pablo Escobar, ‘Orange is the New Black’’ and ‘’House of Cards’’ confirms the sharpness of Netflix’ plan to launch more original content.

Netflix’s aggressive move into fresh serials is part of the plan by the firm to explore more areas for revenue and to improve its profits. The cost that Netflix pays on license deals is already taking a big bite out of its margins. Reed Hastings’ goal is to map the services of the video streaming firm to the internet and other inlets to provide all groups of audience with unique shows that will appeal to each group as well as to everyone.

Netflix’s plan is to become the entire internet’s TV. The firm hopes to achieve this aim by distributing fresh video content all over the world. It’s already making decent headway with its global expansion plans as its seeks new frontiers for sales outside of the U.S.

To make original content within the next year, Hastings says his firm has budgeted a big sum of $5 billion. This budget covers money needed to do a number of things, which getting top stars from Hollywood and for buying up original Bollywood films.

Time Warner’s Big Gamble

The web has made movie distribution less of a problem for Netflix and the firm wants to capitalize on this by trying new things. Netflix is less reliant on media firms and this change in its model is already raising concerns with Time Warner and the big TV networks. No Netflix deal means no easy money that usually come by selling reruns to video streaming firms like Netflix.

Hence, Time Warner already making plans to find its bearings before Netflix ends the romance. Yet, the move by Time Warner and other TV firms to cut off deals with streaming services such as Netflix is a great risk.

All the same, the end of the license deals won’t happen overnight since the existing deals will run for a number of years. In the long run, Time Warner will be giving up some licensing money to pay more attention to their core line of business to avoid a further decline of its ratings.

 

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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