Netflix cuts content budget amid dominating streaming wars

Netflix has a fantastic previous year, delivering major hits including, TV shows and films, despite spending slumping in 2022.

According to Variety, the streaming giant put aside a small fortune on content for both TV shows and movies, highlighting the financial austerity.

Earlier year, the company forked out less than 4.9%, i.e. $17.70 billion from the previous year, a mere $16.84 billion cash for content.

Moreover, the streamer payments for content obligations for the acquisition, licensing and production of content over multiyear periods also experienced a slump from the previous year, declining at 5.7%, from $23.16 billion to $21.83 billion.

The steady content spending and other cost-cutting measures, including layoffs and slower hiring, led the company to project a “sustained” growth trajectory in free cash flow.

“Now that we are a decade into our original programming initiative and have successfully scaled it, we are past the most cash-intensive phase of this buildout,” Netflix said in its Q4 2022 letter to shareholders.

“As a result, we believe we will now be generating sustained, positive annual free cash flow going forward.”