How Netflix Plans to Spend $8 Billion in 2018

While competitors race to catch up with Netflix, the largest online TV service in the world is planing to spend money to make money, according to Bloomberg.

The streaming pioneer will deploy as much as $8 billion on programming next year, as much as a third more than in 2017. The increase alone is almost as much as HBO spends annually. Netflix will also pony up more than $1 billion for marketing. The money will fund an ever-growing array of programming designed to attract even more customers. While critics say the spending is risky, investors approved of the plan.

Chief Content Officer Ted Sarandos said Netflix will release more original movies next year than Hollywood’s three largest movie studios (Disney, Warner and Universal) combined. Most of these films will be low-budget projects like those seen at film festivals or local art-house theaters, others will be lowbrow comedies.

Yet Netflix is also starting to fund big-budget movies that would be right at home on the big screen next to “Star Wars“ and Batman, like the Will Smith movie “Bright“ due out in December, meaning the company is mounting a growing threat to theaters.

The company has signed up more than 56 million customers outside the U.S., relying mostly on shows made in the U.S. Now the company is ramping up production in several languages in a bid to sign more users in Europe, Africa, Asia and the Middle East.

Netflix released its first Italian and German series this year, and plans a substantial increase in the number of shows it makes for foreign viewers in 2018. The company has 30 different projects based on the Japanese style of animation in different stages of development, Sarandos said on a call with investors.

Netflix bought comic book publisher Millarworld this summer, the first acquisition in the company’s 20-year history. Though they prefer to build rather than buy, the company said it would seek more opportunities to acquire intellectual property. “Were looking at a lot of things,“ Sarandos said. Netflix wants to claim hot book properties, top producers and new writers before rival media companies.

For all the money they spends on their own shows, programming licensed from others still accounts for the majority of the company’s annual spending. In one of its biggest deals to date, Netflix licensed the rights last year to “Supergirl,“ “The Flash“ and “Riverdale“ from the network CW. Original shows now account for more than 25 percent of Netflix’s overall programming budget, and that figure will continue to grow.

If your ultimate ambition is to be a fully integrated Hollywood studio, merchandising has to play a role. At the end of call with investors, Sarandos donned Christmas sweaters tied to the hit show “Stranger Things.“ They’re part of Netflix’s new push into merchandising and go on sale at Target later this month.