In interview, Netflix's Chief Content Officer Ted Sarandos says the streaming service will spend $7B on original content in 2018
For a soft-spoken man, Ted Sarandos makes a lot of thunderous news. Just consider the headlines he's generated over the last week alone with a succession of game-changing deals.
Context & Ripple Effects
This interview lands mid-arc in Netflix's pivot from renting other studios' libraries to owning its own. The groundwork was laid in 2016, when Reed Hastings and Sarandos laid out a strategy of producing shows locally in many countries for global audiences; the $7B figure is that strategy getting a price tag.
The number did not hold still: within months Netflix had raised the plan to an $8B year, with Sarandos saying roughly 85% of new spending would go toward originals and targeting about 1,000 originals by end of 2018. Seen from 2024, when Bela Bajaria presides over a $17B content budget, this interview is the moment the originals-first commitment became explicit.
First-order effects
- Netflix's 2018 slate shifts decisively toward self-owned shows and films, meaning less of its spend flows to licensing fees paid to traditional studios and networks.
- Sarandos is staking his own mandate on the bet — the same executive who later described greenlighting as "70 percent gut and 30 percent data" is committing the company's largest-ever content sum to it.
Second-order effects
- Studios and networks that had counted on Netflix license revenue face shrinking demand for their catalogs at exactly the moment their biggest buyer becomes their biggest producer, pressuring them to build competing services of their own.
- The commitment sets off a budget escalator across streaming: Netflix's own figures climb from $7B to $8B in a single year and eventually to $17B under Bajaria, forcing rivals to match scale or cede the originals market.
Third-order effects
- If the pattern holds, Hollywood's structure inverts: distributors become producers, studios become streamers, and exclusive-content ownership rather than library access becomes the industry's core asset — a logic that culminates years later in Netflix even pursuing a proposed acquisition of Warner Bros. Discovery.
- Content cost inflation becomes structural rather than cyclical, since each platform's originals slate is a fixed competitive requirement, not a discretionary line item.
The trend: Streaming is shifting from licensing other studios' catalogs to owning exclusive originals, with each platform's annual content budget ratcheting upward as the competitive floor rises.