Netflix to Spend $13B on Original Content in 2018

Netflix Inc. (NFLX), a company that started two decades ago as a DVD-rental service, is now flexing its muscles and relishing its position at the top of the entertainment industry by planning to spend more money than any film studio or television company on content this year. 

According to a June 30 report by The Economist that cited data from a Goldman Sachs assessment, the Los Gatos, California-based on-demand streaming giant will spend between $12 billion to $13 billion on original content in 2018. This number far exceeds the $8 billion that Netflix was predicted to spend as of October 2017, and the $6.3 billion on programming that it spent last year, according to MoffettNathanson. (See also: Can Disney Spend its Way to Content Dominance?)

Tech Titans Double Down on Shift to Streaming

This massive bill should help the Silicon Valley behemoth continue to rake in top talent, adding to its list of high-profile producers and actors including Chris Rock, Shonda Rhimes and David Letterman. The Economist predicts that the tech titan will produce 82 feature films in 2018 alone, compared to Warner Brothers at 10 and the Walt Disney Co. (DIS) at 10. The source also stated that Netflix will produce or acquire 700 new or exclusively licensed programs, including at least 100 scripted dramas and comedies, which will be produced across 21 countries. 

Netflix isn't the only deep pocketed tech titan going after the traditional media industry. Apple Inc. (AAPL) is reportedly looking to beef up its video streaming platform by bundling it with a news and magazine subscription service in 2019. The firm has doubled down on original content with projects and partnerships including a multiyear deal with Oprah Winfrey. The smartphone maker reportedly plans to spend $1 billion on content acquisition and programming this year, while Inc. (AMZN) is projected to shell out $5 billion. 

Shares of Netflix, which closed up 2.5% on Friday at $408.25, have gained a whopping 112.7% year-to-date (YTD) and 179.2% over 12 months, sharply outperforming the broader S&P 500's 3.9% return and 14.3% growth over the same respective periods. The company has repeatedly beat the Streets expectations for subscriber additions despite increasing prices, listing 125 million worldwide users in March 2018, including 57 million U.S. subscribers. (See also: Apple May Pair Video Streaming With Magazines.)

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