Netflix Spending On Content Set To Climb Past $17B In 2020, Analyst Expects

Netflix will spend $17.3 billion on content in 2020, according to a new forecast by Dan Salmon, an analyst with BMO Capital Markets.

The company spent a bit more than $15 billion in 2019. Salmon sees the tally rising past $26 billion by 2026. CEO Reed Hastings and other executives have continued to assert their plan to continue increasing spending on acquiring, producing and marketing content, despite the company’s $13.5 billion in total debt. Netflix has raised money to fund its operations by selling bonds. That move has prompted concern in some financial quarters about how the company will continue to grow without advertising or other non-subscription revenue streams as the global streaming marketplace becomes more saturated.

In a note to clients, Salmon said there will be “multiple winners” in the intensifying competition in streaming. Apple and Disney have just launched subscription services, with WarnerMedia and NBCUniversal following with their own entrants this spring.

Netflix will report its financial results for the fourth quarter next Tuesday, January 21. Most analysts are expecting a significant uptick in subscribers in the period, given that the fourth quarter is historically when top-shelf originals debut. This year’s fourth quarter saw the return of prestige drama The Crown, as well as genre title The Witcher, with high-profile films such as The Irishman, Marriage Story and 6 Underground. As of its last report in October, Netflix had 158 million global subscribers.

John Blackledge, an analyst with Cowen & Co., pointed to the “robust” film slate, which he cited as one reason he expects a “solid” quarter. Original programming in the quarter totaled 802 hours, according to Blackledge, which was a 3% uptick from the fourth quarter of 2018.

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