Netflix Inc. (NFLX) has set its sights on becoming the most prolific movie studio in Hollywood.
Scott Stuber, Netflix’s original movie chief, told The New York Times that the wheels are in motion for the streaming service to launch an onslaught of new original films. Stuber, who has been tasked with making the company's original film line up as successful as its television operation, said Netflix aims to release about 90 original movies per year, three times the number produced by Comcast Corp.’s (CMCSA) Universal Pictures, one of the most prolific studios in Hollywood.
Stuber added that Netflix will fulfil that ambitious goal by making about 20 original movies per year with budgets ranging from $20 million to $200 million, and producing roughly 35 indie films per year with budgets below $20 million. The rest of the tally will be made up of other types of films, such as documentaries and animation, Stuber said.
Netflix's focus on ramping up its original movie content is designed to boost its subscription numbers and profits. Originals are popular with viewers and generate more money for the company as they eliminate the need to acquire expensive streaming rights.
The Los Gatos, California-based firm also hopes that producing more original films will increase its chances of winning Oscars and attracting top industry talent. The streaming giant racked up 112 Emmy nominations earlier this year for its TV productions and is now plotting to enjoy similar success in the movie industry.
To help it achieve its Oscar aspirations, Netflix has been busy securing the services of some of the movie industry’s biggest stars. They include directors such as Martin Scorsese, Steven Soderbergh, Guillermo del Toro and Michael Bay and actors including Meryl Streep, Ben Affleck, Eddie Murphy, Sandra Bullock and Dwayne “The Rock” Johnson.
“If you’re going to build a great film studio, you have to build it with great filmmakers,” Stuber told the Times. “We’re trying to build a new studio that is exciting for artists.”
Netflix’s content ramp-up has weighed on the company’s free cash flow, prompting some analysts to advise shorting the stock. However, the shares have comfortably outperformed the broader market, indicating that investors continue to focus instead on increasing subscriber figures.
In October, the streaming giant reported nearly 7 million new subscribers in the third quarter, comfortably beating analyst expectations. The shares are up 39% this year.
Earlier this month, Saturday Night Live poked fun at Netflix. The show, hosted by The Crown’s Claire Foy, ridiculed the streaming service’s aggressive original content ramp-up.