Netflix CFO On Determining Content Spend – “We’re a Learning Machine, We Look At It Every Quarter, Every Year And Iterate”

deadline.com:

Netflix CEO Spence Neumann described a top-down and bottom-up process for determining content spend, which is expected to come in at about $18 billion in 2025 and, he said, is “not anywhere near a ceiling.” “It’s a little art in science,” he added during a Q&A at the Morgan Stanley media conference.

On the top line, “We have a pretty good sense of predictability of our revenue. We’re primarily a subscription model. We’ve got a pretty good sense over time of the ability to kind of drive demand and revenue from our investments across the business.

So we start with that, and then we also set our margin targets.” “Then what’s left over is to spend into content. So then there’s the bottom-up exercise … as we look [at] those categories of content, across genres, across countries and regions and across original and licensed content, and where can we deliver highest impact.

We’re a learning machine. So it’s fluid, it’s iterative. We look at it every quarter, every year, and iterate … It’s how in any given year that we can, in a responsible way, invest into the growth.” Netflix has a massive household audience of about 700 million globally.