What’s next for Netflix? 12 important details we’ve learned about the future of on demand

Netflix's latest letter to shareholders provides some intriguing details about where the company is going next. What do you need to know?

135497.d3dfe1a0-8108-4789-b0df-d7231e5dab05

Netflix may be super secretive about exactly how many people are watching its TV shows and movies, but there are some things even they can’t keep quiet for long.

Advertisement

A trawl through the company’s latest letter to shareholders reveals some surprising details about what the company plans to do next.

Here’s what we learned.

1. Netflix wants to spend much, much, much more on original movies and TV shows

135498.b02a6d6c-aa7b-4a2f-b394-544a494e5c5d

Hardly surprising, but it’s worth repeating. With new releases every week, people keep wondering whether we’ve reached the point where there’s simply too much TV out there. 

Well, Netflix has an answer. No.

Instead, the company will continue to growing its original content “aggressively”. It’s spent $6 billion in content this year, along with another $1bn on marketing. And there are no plans to slow down.

2. Lots of that money will be spent abroad – including the UK

Netflix may be firmly based in the US, but it has its eye on global markets. Its bosses just need to work out how to make shows that appeal abroad.

“We have high satisfaction and are rapidly growing in Latin America, Europe and North America,” the shareholder letter explained. “We are making good strides in improving our content offering to match local tastes in Asia, Middle East, and Africa, but have much progress to make, like in Latin America a few years ago.”

We’ve already seen that in the UK, with ambitious co-production deals with the likes of the BBC and ITV. And those partnerships are just as important outside the English-speaking world.

3. Netflix subscribers really like Adam Sandler movies

135496.f65810fb-3c53-4d89-b77e-b35680040fd4

It seemed like a bit of a throwback when Netflix partnered with Adam Sandler to make four original movies, but according to the company it’s paid off: people have spent more than half a billion hours watching Adam Sandler movies since the first movie was released, and there are now plans for four more.

4. Netflix definitely isn’t worried about competition from Amazon

Amazon too is spending big on new subscribers, with The Grand Tour just the tip of a very expensive iceberg. But CEO Reed Hastings isn’t worried.

“They’re doing great programming and they’ll continue to do that, but I’m not sure if it will really affect us very much because the market is just so vast,” he told shareholders. “Think about it: when you watch a show from Netflix and you get addicted to it, you stay up late at night,” he said. “We’re competing with sleep on the margin, and so it’s a very large pool of time.”

In short: “We’re like 2 drops of water in the ocean of both time and spending for people.” How philosophical.

5. Some Netflix movies will be released in cinemas

The streaming service has had a fraught relationship with Hollywood over the past few years. On the one hand, it needs good relationships with studios in order to fill its movie catalogue. On the other, Hollywood is worried that more movie content at home will mean box office numbers will drop.

To make matters even more complicated, Netflix is now attracting the likes of Brad Pitt and Will Smith to star in movies that will never get a cinema release. Or so we thought.

“Since our members are funding these films, they should be the first to see them,” the shareholder letter explains. “But we are also open to supporting the large theater chains, such as AMC and Regal in the US, if they want to offer our films, such as our upcoming Will Smith film Bright, in theatres simultaneous to Netflix. Let consumers choose.”

It’s something – but if you already have Netflix, are you really going to spend money to go see their movie in the cinema?

6. Netflix is definitely not interested in live TV…

Amazon has recently invested heavily in NFL American Football rights – but Netflix isn’t interested in streaming live sport or TV.

It’s “not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows,” the company confirms.

7. …But it is interested in religious programming

“The faith-based market is something that we’re engaged [with] on the edges, but we’re looking to do a lot more,” says Chief Content Officer Ted Sarandos.

Hallelujah.

8. Netflix wants to introduce more videos to the home screen

All those episode cards you know so well? Well, get ready to see them move… 

If that sounds like a nightmare tumblr blog of gifs and epileptic fits, Netflix is worried too. That’s why it’s in no hurry to change: it’s a “multi-year project” apparently, requiring “judgment, creativity, and testing”.

That said, its previous platform upgrade has been successful: the new ‘thumbs up, thumbs down’ rating system has proved twice as popular as the previous star rankings. 

9. 13 Reasons Why was off the charts in Google

The company’s most recent original series, launched right at the end of March, has generated some of the biggest buzz of the year.

135481.d353e4b0-552c-4473-b50d-cb5e4e76ddb3

Along with the teen hit, 2017 is set to be the year Netflix plays big on original stand-up routines. Dave Chapelle’s live shows have been the most popular so far, and Sarandos says it’s a natural fit for the service.

“The format lends itself really well to what we’re doing in that it’s uncensored and it’s commercial free, and that it allows for a lot of creative freedom,” he says.

10. House of Cards was originally meant to air earlier this year

135497.d3dfe1a0-8108-4789-b0df-d7231e5dab05

Every previous season has landed around February time, but season five won’t arrive until 30 May. It wasn’t part of the plan, and has kind of screwed with their forecasts, but May is set to be the month of big returning shows, with Master of None, Sense8 and Incredible Kimmy Schmidt all returning next month. 

11. The writers’ strike could really mess up your favourite Netflix shows

In the UK, we haven’t typically been as affected by previous Hollywood writers’ strikes, but that could change with on demand series booming.

A strike is threatened for this May, and Netflix executives are watching closely. “Look, we’re keeping an eye on it like everybody else,” Sarandos says. “And like everybody else, our productions would be impacted if it happens. We may be impacted a little bit less because we’re not on such a rigid production schedule. We’re not producing for the fall and the summer, we’re in year-round production. But some of our productions would be held up in the event of a strike.

“Our fingers are crossed that that won’t happen.”

12. Netflix wants to be as big as YouTube

“We’ve definitely got YouTube envy” says Netflix CEO Hastings.

“I remember that YouTube announced they were 1 billion [hours of video] a day, and when we looked it up, we’re little over 1 billion a week. So we’ve got a long way to go to catch up to YouTube.”

Advertisement

So, with that enticing little nugget of viewer data ringing in our ears, let’s see what the rest of 2017 brings on Netflix.