Netflix isn’t slowing down. The world’s biggest streaming service is projected to spend $17.3 billion this year on content, according to a new estimate from BMO Capital Markets, $2 billion more than it spent in 2019. By 2028 Netflix is predicted to spend $26 billion per year on content.
Netflix’s big investment comes as it is dealing with many new competitors including Disney+, AppleTV+ and several others coming later this year. Those services haven’t been producing the same amount for new content as Netflix. Disney will put about $1 billion into new shows for Disney+ this year. HBO Max is expected to put $2 billion into its service in its first year. NBCU Peacock is also projected to put $2 billion into content in its first two years.
Some shows and films that Netflix lost, like Friends and the Pixar collection, were hits for Netflix in previous years. To keep the hit shows coming, Netflix puts itself in debt to produce new content. By last count, Netflix’s total liabilities, including debt, totaled $24.1 billion, according to its third quarter financial report.
Still, the debt and increased competition hasn’t scared away investors. Netflix’s stock is trading at about $338 per share on Thursday morning. With more than 158 million global customers and more than 60 million in North America, Netflix has started to look towards international markets like India to attract new subscribers, which means producing new shows targeted for different audiences.
Just two years ago, Netflix spent $13 billion creating original content. This increase in spending is attracting big names in Hollywood, including Game of Thrones‘ David Benioff and Dan Weiss, Gwyneth Paltrow, Ryan Murphy and Shonda Rhimes. Barack and Michelle Obama are also producing a documentary for the network.
BMO Capital anticipates Netflix will continue investing heavily in content as the decade unfolds, projecting the company’s content budget will increase to $26 billion by 2028.