When Netflix first announced it was getting into the originals business it opted for a traditional windowing model for its flagship series House of Cards — covering a portion of the show’s production budget, but leaving syndication and ownership rights to producers Media Rights Capital.
Three years later, having established itself as an emerging rival to networks like HBO and Showtime when it comes to original programming, the company is starting to try out different types of deal models.
“You’ll see us experiment with ownership,” Netflix chief financial officer David Wells said at the J.P. Morgan Global Technology, Media and Telecom Conference on Tuesday, when asked if the company is going to move toward an owned-content model.
With plans to spend $3.2 billion globally on content this year, Netflix is after greater control and exclusivity, Wells said.
“Most of the time, control is affected through ownership. If we can gain control through a long-term first window licence, we’ll do that too. What’s really important is a very long-term control of any exclusivity of that licence,” Wells said.
“We’ve done certain originals to date … The common aspect (among them) is that long-term licence period. But fully expect us to have owned models,” he said, adding greater control means the SVOD platform means greater creative input when investing into originals.
Netflix’s goal is to hit 60 to 90 million subscriptions in the U.S. over the next 5 years, and investment in content is instrumental in achieving that goal, he said.
“We’ll need to do that by adding more originals, we’ll need to do that by adding more breadth of content. And part of that is making our content more exclusive,” Wells said, adding that its curated library will need to be stacked with content that’s “a little bit less depth and a little bit more 4- or 5-star content.”
A Netflix investor-relations call wouldn’t be complete without a dig or two at its main rival HBO, and Wells tried to get one in at the conference, which is running until Wednesday in Boston with a series of fire-side chats with industry leaders and emerging growth companies.
When asked if Netflix had an opportunity to bid on previously aired HBO content that will stream on Amazon as part of a deal announced last month, Wells said they did not.
“To my knowledge, they didn’t shop it. I would say it’s good older content with some conspicuous absences in the title list. It solves a problem for HBO. They probably were not getting a lot of HBO Go traffic on those catalogue titles, and they need to reach the sort of cord-never market, so I would say that was probably a good deal for them,” he remarked.