Netflix chief says ‘The Crown’ will look a bargain after streaming explosion
CAMBRIDGE, England – Netflix Chief Executive Reed Hastings said on Friday the entrance of Apple, Disney and NBC to the global streaming market will push content costs to levels that make its epic drama about the British Royal family “look like a bargain”.
Hastings’ comments at the RTS television industry conference in Cambridge jolted investors already worried about growing competition and sent the streaming heavyweight’s stock down 6%, adding to a recent sell-off.
Disney and others will vie for subscribers and likely drive up production costs.
Costing a reported 100 million pounds ($125 million) to make, “The Crown” won critical acclaim and has helped Netflix build its subscriber base, which has risen to 152 million and given it a head start over rival pay-TV and technology firms.
“It’s a whole new world starting in November,” Hastings said.
He cited the planned launch of services by Apple and Disney, as well as a ramping up of Amazon’s offerings and the forthcoming Peacock platform from NBCUniversal.
The new video-on-demand subscription services are good news for producers, with rival platforms competing to poach the best content and talent, Hastings said.
“Someday ‘The Crown’ will look like a bargain,” he said.
The show is intended to span 60 episodes over six seasons.
Claire Foy starred in the first two seasons, which traced the life of Queen Elizabeth from her coronation at the age of 25 to the birth of her children and the love affairs of her sister, all while taking in the political dramas of the day.
Oscar winner Olivia Colman will star in the role when the third series launches in November.
Netflix’s stock has tumbled 26% since its quarterly report on July 17, when it said it lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas.
Apple’s streaming service debuts on Nov. 1, starting in the United States and some other countries, followed by Disney’s on Nov. 12.
“People are increasingly understanding that competition is here, and it’s going to increase,” said Morningstar analyst Neil Macker. “Companies like Disney are willing to bleed cash for years to compete in this space.”
Following on the success of “The Crown”, Hastings said Netflix would make a “big increase” in its investment in British television production next year, taking advantage of the country’s strong storytelling expertise.
“The possibilities the internet brings for growing entertainment is phenomenal, and over the next several years, with all of the expansion, I think we are going to see a very large increase in how much content is produced here in the UK,” he said at the conference.
“This year we spent a little over 400 million pounds in the UK and that’s continuing to grow, following our subscriber base.”
Asked if Netflix would spend twice as much next year, he said: “Probably not double, but a big increase.”
(Content & Photos Syndicated Via Reuters)
(Reporting by Paul Sandle, additional reporting by Noel Randewich in San Francisco; Editing by David Goodman and Dan Grebler)