There's an expression that says you have to spend money to make money, and Netflix will certainly be taking that to heart in 2016. With the company announcing this week that the service is now available in 190 countries around the world, the job will be to make sure all those customers have plenty of options to choose from. And that doesn't just mean original content (though that's certainly a very important part of the equation) but also licensing titles to provide a diverse array of viewing options. And the company is going to spend big.
Netflix CEO Reed Hastings, speaking at the Consumer Electronics Show in Las Vegas, revealed that the company will spending $5 billion on content in 2016. To put that into context, HBO spent $2 billion in 2015. Again, bear in mind, this is to cover providing content to 190 countries, so the comparison between the streaming company and premium cable outlet isn't quite the same. Still, $5 billion is nothing to sneeze at and certainly explains why they can, for example, spend $60 million on Brad Pitt's upcoming "War Machine" and not blink an eye.
Or, for another example, why they can ink Adam Sandler to a four-picture deal. Many people were scratching their head when that contract was signed, but Netflix clearly knows their customer base. While the reviews were savage, last month's "The Ridiculous 6" was the most watched movie on the platform in its first 30 days, according to the service. It was also the number one movie in all territories. All this to say that yes, Sandler still has a very large fanbase and/or a lot of people have really bad taste. Still, there are questions: does that metric include people who started watching and turned it off halfway through? As per usual Netflix only reveals the stats they want to, but all this to say, the company has reams of data about their viewers that helps them make decisions on the kind of content to pursue.
However, as the company goes global in a big way, they are going to have to make some hard decisions when it comes to editing content in territories where sex and nudity can still cause concern. Hastings admitted Netflix is thinking about offering edited versions of movies and television shows to fit local standards, comparing it offering "airplane cuts" of movies.
“We’ll see and we’ll have to learn,” Hastings said, adding: “Entertainment companies have to make compromises over time.” In fact, viewers in Japan already get pixellated boobs and genitals, common on Japanese television, when watching "Marco Polo."