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Netflix Costs Rise, Content Shrinks

Netflix Costs Rise, Content Shrinks

Netflix, Inc. (NASDAQ: NFLX) is continuing to increase its budget on content with figures expected to hit $6 billion in 2017.

Despite the increase in spending by Netflix, the company's content library has actually shrunk 40 percent over the past four years — from 9,000 to 5,100 titles.

Now that Netflix has rolled out an international expansion, a larger portion of its budget is dedicated to securing rights to stream its content in the new countries now supporting the platform, according to the Motley Fool.

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Netflix competitor HBO (Time Warner Inc (NYSE: TWX)) has grown its international subscriber base nearly 100 percent, from 42 million in 2009 to 82 million in 2015. HBO has produced this growth while managing to keep its costs down, partially due to its focus on original programming, a strategy that Netflix is shifting toward as well.

A proposed price hike from $7.99 to $9.99 a month for two-screen HD users has analysts at Nomura predicting Netflix could lose up to 480,000 of the company's U.S. subscribers. The price increase is expected to produce an additional $520 million for the company.

While Netflix stands to lose some subscribers from its price increase, it hopes to win back those same customers with its increased original programming.

Netflix currently has 45.7 million subscribers in the United States.

In Friday's pre-market session, Netflix was down 3.88 percent at $88.10.

Posted-In: HBO Nomura streamingTop Stories Tech Media Trading Ideas General Best of Benzinga


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