Lather Rinse Repeat: Netflix Finds Its ‘Tipping Point’

Wired: “In 2016, Netflix spent $5 billion on original programming. Five of the 10 shows people searched for most often last year are Netflix originals … Eager to build on that, Netflix plans to spend $6 billion creating 1000 hours of new content this year, more than doubling its 2016 lineup. At this point, it’s clear Netflix isn’t just a streaming service anymore. ‘For many millions of consumers around the world, Netflix has already become television,’ says Tony Gunnarsson, a television analyst with Ovum.”

“Tony Wible, a Drexel Hamilton analyst, argues that Netflix has a sound business model, one best described as, Spend so aggressively that you dominate, making it impossible for anyone to compete … He expects Netflix to monetize existing subscriptions by doing things like adopting higher pricing tiers for 4K content. And you can bet it will keep cranking out premium original content. After all, it isn’t a single show that hooks new subscribers all over the world. It’s a solid lineup of remarkable programming like The Crown and Gilmore Girls and Black Mirror.”

Netflix CEO Reed Hastings comments: “Very few people will join Netflix for just one title. But there’s a tipping point, one more title you’re hearing about, that causes you to join.” In other words, as Hastings says: “Lather, rinse, repeat.”


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