The content wars are heating up, but this time it’s new faces doing battle. Rather than the familiar networks trying to outdo each others, it’s Netflix and Amazon, two web-based video providers. Both companies emerged from award season with big wins under their belts, and now seem more committed than ever to compete with traditional media outlets on producing great content, with aggressive, and expensive plans.
Now Netflix is announcing that they will take on $1 billion dollars in debt to finance their content strategies, making it abundantly clear that Netflix sees developing their own content as vital to the company’s future. While there has been some confusion in the industry as to what Netflix really is, this strategy suggests that they are indeed just a channel, not an aggregator like cable.
Offering movies and TV episodes have led the company to incredible growth, but if Netflix hopes to continue that success, they know they will be hard pressed to do so if they’re only negotiating for content from other sources. Rising content costs have sent the price of cable through the roof, creating anything but a recipe for success for the cable companies. On the other hand, Netflix has described their original content as very “efficient” from the financial perspective, costing less and performing better than licensed content.