Netflix Invests in Stars

Last week we attended the PayTV conference in Denver. Heavy hitters from the world of entertainment sat on panels and spoke about visions for the future. One of the most interesting things they said was this: when you go to Netflix studio offices the place is filled with a who’s who of mega movie and TV stars.

Over the last few years, Netflix has released many movies featuring great stars. Sandra Bullock, Ben Affleck, Brie Larson, Jack Black, Paul Rudd, Jessica Williams, Chris Rock, Adam Sandler and many other mega stars find creative freedom at Netflix.

The other night I watched the Highway Men starring Kevin Costner and Woody Harellson. It told the story of the two Texas Rangers tasked with bringing down Bonnie and Clyde. I love it. The film gives you a great sense of the desperation felt by so many during the great depression. The set design and costumes were of the highest caliber.

When Netflix attracts some of the greatest stars and storytellers to their studios, you know something interesting is going on. Last year, Netflix spent $12.04 billion on creating and acquiring content. And they will spend even more this year. Netflix gets heat from its investors because they are burning through cash at an incredible speed. However, when you make $15 billion a year and grow at 30% per year then it makes sense to own as much of your own content as possible.

When it all comes down to it, we have Netflix to both thank and blame for the rapidly increasing prices of pay TV. More and more people are happy watching Netflix for a good portion of the week. This means more and more people cut back on their pay TV packages. This means that in order to make up lost revenues, the pay TV company will raise your rates.

Though Netflix can serve up all manner of entertainment, it still does not give you live sports, news or many of the educational programs you find with pay TV. For that, you need an antenna and incredible WiFi. For cord cutters, switching between Netflix and live sports is just a voice command away.