TV

Why Netflix’s Potential ‘Content Crisis’ May Not Be Much Of A Crisis At All

NBC

When Netflix extended its relationship with Warner Media’s sitcom Friends late last year, ponying up $100 million for the rights to air the series on the streaming giant for 2019, it highlighted a potential major crisis for Netflix. Despite churning out hundreds of original series, movies, reality shows, and comedy specials over the years, many of the streaming network’s most popular programs are still those that it licenses from other studios and networks, like The Office, Friends, Parks and Recreation and Grey’s Anatomy. However, as other studios like Apple, Disney, and Warner prepare to launch their own streaming networks, there’s a real danger that Netflix will lose out on some of their most popular programming as studios pull their own content from the service to stream exclusively on their own networks in an effort to boost their own subscriber base.

Disney, for instance, has already announced that it will pull its programming off of Netflix and stream it on its own service, due out this year. In anticipation of that, Netlix has cancelled a number of its popular Marvel series. In fact, while Netflix was reluctant to cancel original programming in the first few years after House of Cards and Orange is the New Black, the streaming service has been far more eager to do so of late with shows that are produced outside of the Netflix ecosystem, like the popular mockumentary series American Vandal, which was produced by CBS TV Studios. That series, however, could attract new suitors, including its own in-house streaming network, CBS All Access.

Ultimately, the content crisis that Netflix may face will only arise if their original programming cannot fill the holes left by the absence of shows like Friends and The Office, should those studios decide to pull them. With the exception of Stranger Things and a few other programs, Netflix hasn’t had a lot of homegrown hits on the scale of Friends in recent years. If the Netflix licensed catalogue gets picked apart by other networks and studios, theoretically viewers could drop Netflix in favor of other streaming services.

What Netflix does have, however, is a massive subscriber base of over 137 million subscribers worldwide (and that doesn’t even account for the hundreds of thousands of people who piggyback on others’ subscriptions). That massive base of subscribers thus gives Netflix a huge advantage over other streaming networks in one very important respect: The Netflix infrastructure puts it in a better position to create hit television shows, and that is hugely valuable to other networks.

Take, for instance, the series You, released by Lifetime last September. It barely made a splash upon its release, and overnight ratings for the series averaged roughly 600,000 viewers a week. When the series debuted on Netflix the day after Christmas, however, interest in You skyrocketed (in fact, Netflix has taken over ownership of You from Lifetime for its second season). Netflix created a hit where another network could not (in fact, recognizing defeat, Lifetime has all but quit making original series).

You is obviously not the first series to benefit hugely from a Netflix boost. AMC’s Breaking Bad doubled its ratings late in its run thanks to the massive boost from Netflix. It was a boost so big that some thought that AMC should be paying Netflix to air Breaking Bad. Meanwhile, The CW’s Riverdale doubled its ratings between the first and second seasons, also thanks to exposure from Netflix. Moreover, in its eighth season, Netflix was able to help boost Showtime’s Shameless to even better ratings, giving the show its highest rated premiere since the third season. The popularity of Shameless on the streaming network may provide even more incentive to Showtime to keep its longest running series around for several more years, even without its biggest star, Emmy Rossum.

Likewise, the first season of USA Network’s Jessica Biel series, Sinner, was so popular on Netflix that many believed it was a originally a Netflix program. NBC’s The Good Place, meanwhile, consistently receives middling ratings on the network, but it remains a hugely popular show on Netflix and therefore can command large licensing fees. Some may also wonder why Fox continued to produce episodes of New Girl even as it struggled in the ratings and even as it was clear some of the cast members were ready to leave the series. The answer lies on Netflix, where New Girl is one of its most popular programs.

In other words, the relationship between Netflix and other studios and networks is often a symbiotic one. Netflix often still relies on other studios to provide it with some of its most popular content, but other studios often rely on Netflix’s massive subscriber base to boost exposure to its programming. This could create some unusual scenarios in the upcoming streaming wars, where competing streaming services like Apple end up licensing its own programming out to Netflix to boost their popularity and slingshot that streaming network into viability. Indeed, as long as Netflix and its subscriber base maintains its Kingmaker potential, it will remain as important to the other networks and studios as their content is to Netflix.

In the meantime, Netflix may need to wean itself off of some of its massively popular licensed programming like The Office, but having Steve Carell and Greg Daniels in-house for Space Force may mitigate the damage that losing The Office might inflict.

×