Netflix plans to make half of its content original programming

Shows like House of Cards and Stranger Things have started a revolution.

Valentina Palladino

Melinda Sue Gordon for Netflix

While Netflix gained popularity by streaming licensed content, the company has been switching gears. According to a Variety report, Netflix wants to make 50 percent of its content original programming over the next few years; the other half will continue to be licensed TV shows and movies.

At the start of 2016, the company announced it would launch 600 hours of original programming, a bump from the 450 hours it released in 2015. Over the next couple of years, Netflix plans to release content owned and produced by the company itself in addition to co-productions and acquisitions. According to Netflix CFO David Wells, the company is currently “one-third to halfway” to reaching its 50 percent goal.

In many cases, Netflix original programming has surpassed the popularity of its licensed content. Shows like House of Cards and Master of None have received numerous awards, and the new show Stranger Things has become a breakout hit in the past few months and has already been renewed for a second season. But Netflix acknowledges that not all of its original programs have been major hits, and the company doesn't believe that they need to be. "We don’t necessarily have to have home runs," Wells is quoted in Variety. "We can also live with singles, doubles, and triples especially commensurate with their cost."

Funding is required to produce that original content, and Netflix has "no immediate plans" to introduce any advertising to its service. Subscription costs not only bring in revenue for the company but also allow it to invest in more original content. Netflix has been in the process up upping its monthly subscription rate to $9.99 for all US users and £7.49 for all UK users, which enables two simultaneous HD streams for each account. That's a $2 or £1.50 increase for those who have been paying $7.99 or £5.99 per month for years, and apparently Netflix has seen higher cancellation rates than it expected since it the increase. However, the company claims between 33 and 50 percent of users come back to the streaming service eventually.