Report: Netflix plans $1.2B spend to produce local content in select foreign markets

Netflix, seeking to cement its toehold in its rapidly expanding international market, is expected to spend as much as $1.2 billion on original content in the United Kingdom, France, Italy and Spain, according to published reports.

Netflix International

The company has publicly said it plans to spend $5 billion on content production and acquisition in 2016.

Researcher Ampere Analysis said the company will produce a number of “high-value” series for those markets, something CEO Reed Hastings and Chief Content Officer Ted Sarandos alluded to in the company’s Q4 2015 earnings call in January.

The Hollywood Reporter this week noted that Netflix’s international push begins Feb. 19 with the release in China of the sequel to Crouching Tiger, Hidden Dragon. Also due out soon is the much-anticipated historical drama that focuses on the British royal family, The Crown, Italian crime drama Suburra, and French political drama Marseille.

Also in store: Feature film Okja, being developed in South Korea; 3%, a Brazilian sci-fi series; Mexican dramedy Club de Cuervos, and a Japanese coming-of-age tale.

“In key markets — U.K., France, Italy, Spain, Mexico — you will start to see focus on high-value TV series, especially ones with a strong global appeal,” Ampere analyst Guy Bisson said.

In Q4, nearly three quarters (72%) of new subscribers to Netflix came from its international business, some 4.04 million subs. The company expects Q1 to see similar results, with 71% of its forecast 6.1 million subscriber adds being from international markets, about 4.35 million.

Ampere, in a recent blog post, said local content was critical to SVOD catalogs, with between 15% and 20% of all movies in Western European markets being locally focused. Content from the U.S. makes up between 40% and 50% of movie catalogs in foreign markets, except in the United Kingdom, where the percentage of U.S. content is significantly higher.

Netflix and Prime Instant Video, Ampere said, typically are dominated by U.S. content.

Stay tuned.

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