Netflix to Focus on Adding Exclusive, Highly Rated Content, CFO Says

 

Netflix is focusing on exclusive, highly rated content as the streaming service adds more programming.

“Our intent is to continue to expand the content library,” CFO David Wells said at Tuesday's J.P. Morgan Technology, Media and Telecom Conference.

Wells added that going forward, Netflix will focus on expanding the breadth of content by adding more originals as well as curated four- and five-star offerings, and making content more exclusive.

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He also pointed out that every time Netflix announced a new deal, the company had seen an increase in the hours of programming viewed.

Wells added, though, the company is focused on both adding content and increasing its revenue margin.

"Our intent is to continue to grow content but to also grow margin, so to grow content spend slightly slower than revenue," Wells said. "Look, we're committed to margin expansion … but we're also committed to making a great long-term product. And if we think, opportunistically, something comes along or we get creative on some piece of content, we're willing to have margins be flat for two or three quarters and do something that's going to strengthen our content offering."

He noted that this was Netflix's approach both in the U.S. and overseas but declined to reveal details about Netflix's plans for European expansion, saying that such information would be revealed over the next few weeks.

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Wells also commented on subscriber reaction to the company's recent price hike, saying the reception was "generally as expected. We were somewhat pleased. We expected a small reaction, and I think we’ve gotten that so far."

Wells reiterated Netflix's opposition to Comcast's pending acquisition of Time Warner Cable.

The streaming service is less concerned with AT&T's bid for DirecTV, Wells said.

“We’re mostly concerned about consolidation on the broadband side, not necessarily on the video side,” he said.

But he added that AT&T's talk of rolling out broadband to an additional 15 million subscribers with its DirecTV purchase seemed like a potential benefit for Netflix.

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