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Netflix to License More Older Content as Competitive Environment Evolves

Netflix has hinted at an increased focus on licensing older content from third-party providers as it evolves its content strategy. In a shareholder letter released alongside its Q3 financial results, Netflix indicated that it may have increased opportunities to license more content as the competitive environment changes.

The company believes that licensing older content delivers additional value for its subscribers and benefits rights holders by increasing awareness and revenue. Netflix highlighted the success of legal drama “Suits” on its platform, which garnered 1 billion viewing hours in a three-month period. Netflix’s strategy of licensing content provides a wide range of content to cater to diverse viewer tastes.

Key Points

  1. Netflix’s Strategy for Licensing Older Content: Netflix aims to license older content from third-party providers and make it available on its platform. This strategy allows Netflix to offer a variety of content that appeals to a wide range of viewer preferences.
  2. Impact of Licensing Older Content: Netflix showcased the success of legal drama “Suits” on its platform, emphasizing the “Netflix effect” in which older content gains traction among subscribers. “Suits” became popular on Netflix, even though it had previously aired on cable and other streaming services.
  3. Results of “Suits” on Netflix: Netflix reported that “Suits” achieved 1 billion viewing hours from June 19 to Sept. 10. Nielsen data indicated that the show was watched by more people during this period than any other film, original TV, or acquired TV content on streaming platforms.
  4. Benefits for Rights Holders: Netflix’s strategy provides rights holders with increased awareness and revenue, extending the life of content by bringing it to a global audience.
  5. Netflix’s Global Impact: Netflix’s distribution footprint and recommendation system allow it to bring content to the center of the culture worldwide.
  6. Agreement with Warner Bros-Discovery: Netflix reached an agreement with Warner Bros-Discovery that allowed HBO shows like “Ballers” and “Insecure” to be available on Netflix’s platform. These shows gained significant success on Netflix and achieved high rankings on their originating networks.
  7. Collaboration with Competitors: Netflix collaborates with nearly every supplier, including direct competitors, demonstrating the value it brings to content providers.
  8. Past Success with Licensed Content: Netflix previously achieved success by licensing content like “Friends” and “The Office,” both of which attracted a new audience to the platform.
  9. Subscriber Count: Netflix reported a total of 247.15 million subscribers globally in Q3, with approximately 77.32 million located in the U.S. and Canada.

Conclusion

Netflix’s strategy of licensing older content plays a significant role in the platform’s content offering. Licensing provides a wide range of options for viewers, increases awareness and revenue for rights holders, and helps older content gain popularity on the platform. This strategy will continue as Netflix looks to expand its content library and cater to diverse viewer preferences.

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