Netflix faces the threat of an exodus of a number of hit shows as it battles to reignite subscriber growth, with almost a third of its most popular content with British viewers – from Friends and Pretty Little Liars to Paw Patrol – licensed from rivals building their own streaming services.
Earlier this month, Netflix’s market value was slashed by almost $60bn as investors panicked that the decade-long streaming boom has come to an end, after the company forecast it would lose millions of subscribers in the first half of this year.
Netflix invests billions of dollars annually in original content – starting with House of Cards in 2013 and extending to recent hits such as Squid Game, Ozark and Bridgerton – in a long-term strategy designed to insulate its business from the impact of Hollywood rivals pulling content they license for their own rival services.
However, research shows that Netflix continues to have a significant dependency on licensed content, with major titles potentially moving off the service when contracts come up for renewal in the next few years.
In the first two months of this year, 31% of the 150 most-viewed shows and films by British users belonged to Netflix’s competition, and a quarter of all viewing was to content owned by rivals with streaming services of their own, according to the research firm Digital.
“There is certainly risk for Netflix,” says Richard Broughton, an analyst at Ampere. “A significant number of its highest-performance titles are licensed from studios with in-house streaming ambitions of their own.”
Friends, the most popular show among British viewers and Netflix’s biggest hit globally, has already been removed by Warner Bros Discovery in the US along with other hits such as The Big Bang Theory to drive its own HBO Max service.
HBO Max is yet to launch in the UK, with Warner Bros Discovery locked in a content deal with Sky until 2025 that blocks the launch of a standalone streaming service. Sky-owner Comcast has also removed big hits such as the US version of The Office to make its Peacock streaming service more attractive in the US, but it has so far decided not to launch it as a standalone streaming rival to Netflix in the UK.
The One Where We Have To Say Goodbye.
We’re sorry to see Friends go to Warner’s streaming service at the beginning of 2020 (in The US). Thanks for the memories, gang ☕
— Netflix (@netflix) July 9, 2019
“The nation’s favourite American sitcoms are safe – for now,” says Ali Vahdati, chief executive of Digital i. “In the long term, Netflix will need to extricate itself from such a strong reliance on US major Hollywood studio content, or else risk high levels of churn when others launch fully in the market.”
This summer, Paramount is launching Paramount+ in the UK and has almost completely removed the Star Trek franchise from Netflix, which Digital i estimates to be worth over £50m to Netflix across Europe. Popular Paramount-owned content that is still on Netflix but likely to move when deals expire include the Sonic the Hedgehog film, the SpongeBob Movie, The Wolf of Wall Street and films The Gentleman and Mother/Android.
Source: theguardian
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