Netflix continues to strengthen its dominant position in the streaming industry by using a hybrid strategy that combines the acquisition of licenses for successful series with the production of original, engaging content. Despite the exorbitant costs involved, Netflix has invested billions of dollars to license established titles such as "Grey's Anatomy," "How I Met Your Mother" and "Seinfeld." This strategic move has not only helped to expand the platform's vast content library, but has also made it easier to eclipse rivals in the race for subscribers.
Netflix's strategy of licensing popular content seems to mesh perfectly with its commitment to investing in original movies and series. In a context where the competition in the streaming industry is hot, Netflix recently announced that it will allocate the majority of its annual budget of 17 billion dollars to the creation of its own and exclusive content. Spence Neumann, Netflix's chief financial officer, emphasized in the company's latest quarterly call that while licensing opportunities are plentiful, the main focus remains on original programming, a direction he anticipates will continue into the future.
Netflix has cemented its reputation as a pioneer of original content, with blockbuster series like “Stranger Things,” “Bridgerton,” and “Wednesday” contributing to a significant cultural presence. In its effort to attract and retain subscribers, Netflix strives to find the optimal balance between expensive productions and often more affordable content licenses.
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Although initially, the success of licensed series like “Suits” seemed to direct Netflix's strategy towards more external acquisitions, the situation changed once the big Hollywood studios decided to sell more of their content to the platform. In recent months, Netflix has signed substantial deals with Disney and Warner Bros. Discovery, thus strengthening its offer of high-quality series and films.
Netflix, by the end of last year, added 14 series from Disney for an 18-month period to its offer, including titles such as "Lost" and "This Is Us", and recently concluded a deal for "Sex and the City" ” from Warner Bros. Discovery. These moves demonstrate that despite a strong tilt toward originals, Netflix is not neglecting the value of licensed series.
Netflix, through internal data, confirms the increased impact of original productions. In the first six months of 2023, 62 of the top 100 most-watched titles were Netflix originals. Among these, "The Night Agent", "Ginny & Georgia" and "The Glory" stood out as extremely popular among subscribers.
Netflix, based on the performance analysis of the first 12 weeks of 2024, continues to show the dominance of originals in the preferences of subscribers, with series like "Love Is Blind" and "Griselda" occupying the first places in the audience rankings. This trend underscores the effectiveness of Netflix's strategy of combining licensed content with original productions, thereby securing a sustainable competitive advantage in the war of streaming platforms.