It's no surprise Netflix (NASDAQ: NFLX) will spend even more on content in 2020. The streaming leader is expected to spend $17.3 billion in cash on originals and licensed shows this year, according to an estimate from BMO Capital Markets analysts. For comparison, big new rivals like Disney (NYSE: DIS) and AT&T (NYSE: T) expect to spend around $2.5 billion and $4 billion, respectively.
But the competition isn't forcing Netflix to push the gas pedal on upping its content budget. In fact, the $2 billion increase in 2020 is smaller than the $3 billion in incremental spending investors saw last year. And while BMO analysts expect Netflix's budget to hit $26 billion by 2028, that represents a compound annual growth rate of just over 5% from this year.
There are a few reasons for the slowdown in content spending in 2020 and beyond, despite the increased pressure from rivals. And importantly, slowing content spend growth provides a path to positive cash flow.