Netflix ploughs £5bn into new hit TV shows

SHARES in Netflix hit an alltime high after the video streaming service reported another thumping increase in viewers and pledged to spend £4.6bn on new TV shows.

More than 104m viewers are now signed up across the world, with bosses saying its Emmynominated shows such as The Crown ( pictured), House Of Cards and Stranger Things were drawing them in.

The company has also reached a major milestone, with the majority of its members subscribing from outside the US for the first time. And it justifies the firm’s gamble to invest billions of pounds in original content.

In a direct challenge to traditional producers such as American networks and the BBC, ITV and Channel 4 in the UK, Netflix has been focusing on producing shows that are exclusive to its platform.

And it will particularly pile pressure on newly appointed ITV boss Dame Carolyn McCall, who takes over in January.

Bosses claim Netflix is becoming a ‘super network’ that will compete globally with different types of programming, from children’s shows to films. Shares in the Nasdaq-listed firm were up almost 13pc yesterday, or $21.64, to $183.34 – their highest value ever.

Ted Sarandos, Netflix’s content chief, said: ‘The success we’ve had with our self-produced shows has given us a lot more confidence to expand it. Because we’re a global network, those rights are really important in terms of being able to control our destiny.’

Reed Hastings, the founder and boss, said viewers were also continuing to spend longer on the service. Netflix said users already watch about 1bn hours of content a week.

A trading update from Netflix for the second quarter of 2017 yesterday said its streaming revenues were also up 6pc, to £2.05bn.

Of the company’s 104m users, 52.03m are from markets outside the US. It also smashed analyst expectations for subscribers, bringing in about 889,000 more than expected. It has committed to spending about £4.6bn on original content this year, which could pose a major challenge to traditional broadcasters struggling to keep pace.

The BBC, which by contrast spends £1.6bn on content for television, was warned this week by industry watchdog Ofcom that licence-fee payers increasingly saw its online iPlayer service as lagging behind commercial rivals such as Netflix.

They also thought it did not take enough risks with the content it makes itself.

In response to pressure on the television industry, including falling advertising revenues, ITV has responded by ramping up investment in its production arm. This has led to runaway hits such as Broadchurch, Downton Abbey, Poldark and Vera. A key challenge for McCall, however, as she prepares to replace Adam Crozier at ITV, will be to improve its on- demand service ITV Hub to compete with the likes of Netflix and other streaming services such as Amazon Prime.