Netflix Co-CEO Ted Sarandos Estimates Levels of Content Spending in 2024 and Weighs Film Strategy as Streaming Rivals Embrace Theater

Netflix co-CEO Ted Sarandos said the company is expected to spend about $17 billion on content in 2024, which is in line with 2023 levels.

The level of spending that shocked the rest of the entertainment industry when it soared during Netflix’s rise has leveled off as the company reevaluated its operations. In addition to the downsizing, the company has embarked on revenue-generating initiatives such as advertising and charging subscribers for sharing passwords and being more disciplined about spending.

“The growth rate certainly depends on the growth rate of sales,” Sarandos said during the company’s first-quarter earnings call.

“We said we would average about $17 billion in 2022-2024,” Chief Financial Officer Spence Neumann recalled to interviewer Jessica Reif Ehrlich, a media analyst at Bank of America. “But there is still a huge entertainment market that needs to be pushed forward. So as our revenue accelerates again, we see many opportunities to increase that viewership, engagement and business opportunity.”

Sarandos was asked if the company is changing its film strategy and rethinking its stance on films, with Reif Ehrlich noting the recent downsizing in the film division. Aside from a few broader rollout experiments, Netflix typically puts films on smaller circuits for a few weeks at most before streaming them for the first time.

“No, Jessica, the film department is fine,” Sarandos replied. Including Netflix movies that won Oscars last month No news from the western front, is “very, very popular with the fans as well,” he added. “We are very happy with the investment in film. Of course we try to improve it, as we do with all our films, but our release strategy – remember that there are many ways to create and collect demand for a film. Getting people into the theater is just not our thing. We create that demand and collect that demand through our subscription service.”

Two streaming technology rivals, Amazon Prime Video and Apple TV+, have both declared their commitment to theatrical releases as drivers of streaming titles. Even major sibling studios have reversed their daily boosts from a year or two ago now that the theater is returning.

“It’s tempting to do the cross-service comparison in the movie arena,” Sarandos said, but size matters. “The other services are not of this magnitude. They don’t have the subscriber base or revenue base to support a single window that we can support even with big budget films.

Netflix’s goal is first and foremost to release films that are “loved and watched,” the CEO added.