The main headline from Netflix‘s Q3 earnings call was the announcement that the premium platform now has more US subscribers than HBO. At the same time, a second item also grabbed our attention: Netflix has revealed its plan to double spending on original programming and expand into film production.
The increased original content budget is a direct result of Netflix’s two major hits from the past year: House of Cards and Orange is the New Black. Netflix doesn’t share view counts, but those two series seem to have had a substantial impact on the site’s subscriber base. Several more originals–such as the Wachowskis’ Sense8–are already slated for release in 2014, and the increased budget will only add to the library.
The expanded budget, however, will also allow Netflix begin producing feature films. Through this action, it can gain ground on HBO in an area where the premium TV channel has excelled for three decades. “On the movie side, I’d keep my mind wide open to what those films would be and what they would look like,” said Netflix chief content officer Ted Sarandos.
Even after it spends more money on originals and moves into films, Netflix’s originals budget will still pale in comparison to HBO’s. Variety notes that Netflix will spend 10% of its budget on originals compared to 40% for HBO. “There’s a big gap from where we are to where we could be,” said Sarandos.
Though the bulk of Netflix’s traffic is still directed toward movies and licensed TV shows, the message is clear: There will be a lot more high-quality originals reaching our computer screens in the next couple of years.