More takeaway on content from Netflix CFO David Wells’ visit with Morgan Stanley this week:
Netflix will double the number of original shows and movies it produces with the goal of having 40 original programs each year. Content Chief Ted Sarandos expects to reach that level in a couple of years, Wells said.
As always, Wells was cagey about how Netflix measures return on investment for these (sometimes pricey) shows in lieu of ratings (and advertising revenue):
“We don’t have to have a show that has 20 million viewers. A success for us relative to cost might be a show that’s got 2 million to 4 million viewers, and if we can find that set of people that’s going to suit us just nicely,” Wells said.
“As long as we are funding the doubles and triples we’re good. And if that content increasingly works outside the U.S. there is another advantage in terms of being able to distribute to a larger platform outside the U.S. and do that in a very efficient, quick manner where we’re bringing content that is in the right size quickly to those audiences. You don’t have to have the one- and two- and three-year delay that increasingly world consumers are intolerant of and you see that reflected in the piracy numbers.”
What’s cool and somewhat scary about the idea of global micro markets for content is that Netflix will be able to produce some very elaborate data about global media consumption for the first time ever.
The Netflix algorithms’ ability to predict ebb and flow of global tastes will surely yield some interesting insights into other facets of the collective human psyche. Take a look at this story I wrote about how Netflix-type algorithms are being used in other settings.