Why Netflix spends $17bn a year on content. The financial logic of the streaming-original business, what it has produced, and what is starting to fail.
The major streaming platforms now collectively spend over $80 billion per year on content production. Netflix alone has spent over $17 billion in recent years. Apple TV+, Amazon Prime Video, Disney+, Max, Paramount+, and Peacock contribute the rest of the spending. The scale is unprecedented in entertainment-industry history; no previous content-distribution platform has spent at this level on original production.
This essay walks through why the spending exists, what it has produced, and where the model is starting to fail.
Netflix's transition from a back-catalogue licensing service to a major original-content producer began around 2013, with the launch of House of Cards and Orange Is the New Black. The structural reasoning was that licensing-only content was vulnerable to content owners (Disney, Warner Bros., Sony) eventually launching their own streaming services and pulling their libraries. Netflix needed to own original content that competitors could not extract.
The strategy worked, but it has been expensive. Netflix's content-spending acceleration across the 2010s tracked the increasing competition from the studios' own streaming services (Disney+ launched 2019, HBO Max 2020, Paramount+ 2021, Apple TV+ 2019). Each new competitor produced additional pressure on Netflix to invest in original content that could not be replicated. The 2019 launch of Disney+ in particular forced Netflix to commit to higher-budget original-film production to compete with Disney's franchise-IP catalogue.
The original-film output of the major streamers has been, by significant variance, mixed. The high points have been substantial. Netflix's Roma (2018) won Best Director. Apple's Killers of the Flower Moon (2023) was nominated for ten Oscars. Apple's CODA (2021) won Best Picture. Apple has financed work by Martin Scorsese, Ridley Scott, and Ron Howard at budgets the traditional studios would not have approved. Amazon has financed films by Park Chan-wook, Sofia Coppola, Luca Guadagnino, and others.
The low points have been more numerous. The vast majority of streaming original films are forgettable algorithm-driven action and romantic-comedy product. Netflix in particular has produced hundreds of original films that have generated essentially zero cultural footprint despite significant budgets. The pattern reflects the platform's auto-renew subscription model — Netflix does not need each individual film to succeed; it needs the cumulative library to retain subscribers. Individual film quality is, in some sense, less commercially important than total library depth.
The spending growth that defined the 2018-2023 streaming-content arms race has substantially slowed since 2024. Several specific developments contributed: the 2023 Hollywood strikes (which produced contracts increasing residuals and AI restrictions); the 2024 Disney-Warner Bros. Discovery merger discussions; the broader investor pressure on Netflix to demonstrate profitability after years of subscriber-growth prioritisation.
The 2024 cancellations were significant. Netflix dropped multiple originals from its development slate. Apple TV+ paused several greenlit projects. Amazon's MGM-acquisition projects slowed. Max removed dozens of titles from its catalogue (some entirely, to avoid paying residuals). The pattern suggests that the era of unlimited streaming-content investment has, structurally, ended.
The post-2024 streaming environment is, in some sense, a return to entertainment-industry historical norms. The major platforms are now operating under shareholder pressure to demonstrate profitability rather than subscriber growth at any cost. The content spending is being calibrated against measurable engagement metrics rather than against the abstract goal of becoming the dominant platform. The platforms have substantially completed their library-building phase and are now operating as established competitors rather than as growth-phase startups.
The implications for working filmmakers are real. The streaming platforms remain significant financiers of mid-budget adult drama — substantially more significant than the traditional studios. But the platforms are no longer making green-lighting decisions purely on cultural-acquisition logic. A film that does not produce measurable engagement is no longer commissioned. The mid-budget adult drama discussed in our essay on why the mid-budget film died is no longer dying as quickly, but it is no longer being financed at the 2018-2022 rate either.
The structural prediction is consolidation. Multiple analysts have suggested across recent years that the global streaming-platform count is unsustainably high; some merging of platforms is likely across the next several years. Apple's likely path is continued commitment to prestige cinema as a brand-building exercise. Amazon's path probably extends the MGM-acquisition logic toward owned-IP franchises. Netflix's path is harder to predict but probably involves reduced original-film output and increased reliance on the licensed-content catalogue.
For working filmmakers, this means the streaming-financing window that opened around 2018 is closing somewhat. The window has not closed entirely — significant original work continues to be financed — but the bargaining position of any individual filmmaker has weakened. The next decade of mid-budget drama will, in some sense, depend on whether the streaming platforms continue to financiers of the form, on whether the traditional theatrical studios can be persuaded to return to the form, or on whether new financing infrastructure emerges. The current trend is toward less production rather than more.
For more on the streaming-theatrical question, see our essay on streaming vs theatrical.