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Music. Subscribers of the $9.99 per month service will also have access to premium original content not available on the advertising supported side of YouTube. YouTube is pairing some of its most popu- lar video creators with Hollywood talent to create unique content. For example, YouTube star Felix “PewDiePie” Kjellberg has teamed up with the producer of The Walking Dead to create the scripted horror show Scare PewDiePie . 106 To us what is important is we are not doing what everybody else is doing, competing for the same sources of material, the same creative elements. We are looking for people who are proven to work really well on our platform. – Robert Kyncl, YouTube Chief Business Officer 107 Challenges RELEVANT CONTENT In 2017, Netflix plans to spend $6 billion on original and licensed content, up from $5 billion in 2016 ( Exhibit 4 ). 108 The majority of this spending goes towards television shows and movies licensed from others. 109 For example, Netflix has global licensing agreements for Fox’s “Gotham,” AMC’s “Breaking For the exclusive use of T. Tran, 2018. This document is authorized for use only by Tran Tran in BUS 498-spring 2018 taught by Yan Ling, George Mason University from January 2018 to July 2018.
12 Netflix, Inc. Bad,” and ABC’s “How to Get Away with Murder.” Within the next few years, Netflix aims for half of its content be original. 110 “For a dollar spent and an hour viewed, you get more hours of viewing per dol- lar spent on original programming versus licensed content,” noted Netflix’s Ted Sarandos in 2015. 111 As Netflix expands worldwide, it has invested in global originals such as: “The Crown,” “Marseille,” and “Narcos.” Netflix is also making forays into unscripted (reality) television. “Ultimate Beastmaster,” a global competition series produced by Sylvester Stallone is scheduled to debut in 2017. 112 Netflix has avoided sports and news content, but is pushing children’s programming. About 20 of Netflix’s 70 upcoming global originals are intended for children. 113 As competitors like Amazon and Hulu invest more in content, Sarandos will be competing not only for viewers, but also for talent. “It’s a race, but there are going to be many winners,” opined Hastings. “If you can build an iPhone app, you start a TV channel. We are going to have to see how that plays out.” 114 INTERNATIONAL GROWTH Of Netflix’s 93.8 million subscribers, 49.4 million (or 53 percent) are in the U.S. ( Exhibit 5 ). 115 Netflix announced in January 2016 that it would be radically expanding its services internationally from 60 to 190 countries. Netflix is noticeably absent from China, a market where Hastings com- mented that Netflix is still, “in the relationship building phase.” Netflix is adding services in Arabic, Korean, and Chinese to the 17 languages currently supported. Netflix’s original programming will be available in all countries; however, the availability of licensed content varies by country.

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