Original content is the way forward for Netflix.
Just days after hiking its prices in the US, streaming giant Netflix has reported full-year revenues of $16bn for 2018.
Revenues for the year were up 35pc and the company doubled operating profits to $1.6bn.
For the fourth quarter, Netflix reported revenues of $4.1bn, up 32pc on the previous year.
The company finished 2018 with 139m paying memberships, up 29m from the beginning of the year.
“Our multi-year plan is to keep significantly growing our content while increasing our revenue faster to expand our operating margins,” CEO Reed Hastings told shareholders.
Original content provides an epic picture for streaming
Netflix is intent on expanding its push into original content, rightly reasoning that it gets more of a financial return from original content than from licensing content from elsewhere.
In its first four weeks on Netflix, Bird Box was viewed by 80m households. Other Christmas hits included The Christmas Chronicles, Roma, 22 July, Private Life and the Coen Brothers’ The Ballad of Buster Scruggs.
Hastings confirmed that the original content strategy makes sense. “As a result of our success with original content, we’re becoming less focused on second-run programming. For example, we launched our originals strategy for the unscripted genre only two years ago. Today, Netflix originals like Tidying Up with Marie Kondo account for the majority of total unscripted view share on Netflix, while viewing of all unscripted programming has increased meaningfully during that time.
“We are ready to pay top-of-market prices for second-run content when the studios, networks and producers are willing to sell, but we are also prepared to keep our members ecstatic with our incredible original content if others choose to retain their content for their own services.”