When the first season of House of Cards made its debut on Netflix in February 2013, pundits wondered whether the video streaming service could really afford the $100m political drama. At the time, Netflix had 33.3m streaming subscribers, many of whom quickly became glued to the tale of Washington DC scheming and intrigue.
2013年2月，当《纸牌屋》(House of Cards)第一季在Netflix上映时，评论人士们还怀疑这家视频流媒体服务商是否真能承担得起这部耗资1亿美元的政治剧。当时，Netflix拥有3330万流媒体订阅用户，其中许多人很快迷上了这部讲述华盛顿特区阴谋诡计的电视剧。
Five years ago, original commissioning was a novelty for what was only a few years earlier known primarily as a DVD-by-mail business. Then, Netflix was heavily dependent on content distribution deals with traditional media groups including Walt Disney and Mad Men-maker AMC for the vast majority of its online library.
5年前，对于这家几年前还以在线租赁DVD业务为主的公司来说，委托制作原创内容还是个新鲜事物。当时，Netflix的在线影库严重依赖与华特迪士尼公司(Walt Disney)和《狂人》(Mad Men)制作商AMC等传统媒体集团签订的内容分发协议。
Fast-forward to early 2018 and Netflix can afford to write off $39m without Wall Street even blinking. The $39m non-cash charge incurred in the fourth quarter of 2017 was related to programming, including two episodes of House of Cards that Netflix commissioned but will never air due to the sexual harassment scandal that erupted around the show’s leading man, Kevin Spacey.
That charge was reported alongside another forecast-busting set of results on Monday that sent Netflix’s market capitalisation soaring above $100bn for the first time, pushing shares up 10 per cent in early trading yesterday. Annual revenues jumped 32 per cent year on year to $11.7bn in 2017, while net income trebled to $559m, thanks to hit shows including Stranger Things .
Yet as investors cheered Netflix’s accelerating growth to reach 117.6m subscribers globally, the group warned that maintaining momentum in original content would come at an upfront cost that makes that initial $100m outlay look like a rounding error.
Netflix’s liabilities from content prepayment and debt have increased four-fold in the past five years. The combination of its long-term debt and streaming content obligations has swelled from $6.1bn at the end of 2012 to $24.2bn at the end of last year.
Of that total, $17.7bn is streaming content obligations — what it pays for the acquisition, licensing and production of television shows and movies, sometimes years in advance of broadcasting a show. The other $6.5bn is debt — and Netflix said on Monday that it planned to tap the bond markets again soon.
Analysts at Jefferies said in a note to clients that expenses such as marketing spending and programming cost were “higher relative to our expectations”.
To justify that $24bn of liabilities, chief executive Reed Hastings is asking investors to bet on Netflix’s success in producing hit shows as it races to fill the programming gap left by the likes of Disney turning from partner to competitor in the streaming market.
“We’ve had that track record in the last couple of years at greater and greater scale,” Mr Hastings said in Monday’s quarterly analyst interview. “We are continuing to take it up a notch.”
Netflix executives touted the upcoming launches of Altered Carbon, a science-fiction show, and Everything Sucks, a coming-of-age comedy-drama set in 1990s Oregon, as examples of shows that would continue to attract new subscribers in 2018.
Netflix的高管力推即将发布的科幻剧《副本》(Altered Carbon)，以及以上世纪90年代俄勒冈州为背景的成长喜剧片《诸事皆衰》(Everything Sucks)，以此证明公司有能力在2018年继续吸引新用户。
The company also plans to commission more programming in languages other than English, from just a handful of shows last year to more than 30 international “originals” in 2018. Alongside that are dozens more full-length movies, after the Will Smith blockbuster Bright proved a hit last month.
In total, Netflix plans to invest as much as $8bn in new content this year — and Mr Hastings warned that the budget would continue to grow. “It will definitely of course be higher in 2019 and 2020,” he said of content costs. “Don’t think of $8bn as some new plateau.”
Competition too is increasing. Disney plans to launch new subscription streaming services this year and Hulu, the US internet video service that is jointly owned by Disney, Fox and Comcast, grew to 17m subscribers last year.
Anticipation of that competition from traditional media companies was what drove Netflix to invest in its own TV shows in the first place, according to content chief Ted Sarandos. Mr Sarandos added that many Netflix shows that are licensed from or made by Disney are locked into long-term deals. “As long as they keep making those shows, they continue on Netflix,” he said.
If Mr Hastings was concerned about the impact of Disney’s $66bn plan to buy 21st Century Fox’s entertainment businesses, he did a good job of hiding it when he was quizzed on Monday.
在被问及迪士尼以660亿美元收购21世纪福克斯公司(21st Century Fox)旗下娱乐业务计划的影响时，黑斯廷斯即使心存忧虑，他也掩饰得很好。
“These kind of big US media company mergers are pretty peripheral to us,” he said. “I was as surprised as anyone else that Fox was willing to sell.”
Yet even though Rupert Murdoch has suggested that the competitive threat from Netflix contributed to his decision to sell Fox to Disney, Mr Hastings said he was looking forward to the new streaming services that would follow the deal — as a viewer, at least.
“Disney, with its strength of brand and unique content, will have some real success,” the Netflix chief said. “I know I’ll be a subscriber of it for my own personal watching.”