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Television Movies Entertainment

Netflix Wants 50% Of Its Library To Be Original Content (techcrunch.com) 187

An anonymous reader writes: Netflix is looking to shift its content mix even further towards original TV and movies, with a goal of achieving a 50 percent mix between its own programming and stuff licensed for its use by outside studios. The 50-50 target was revealed by Netflix CFO David Wells at the Goldman Sach's Communacopia conference on Tuesday, and Wells added that they'd like to hit that mix sometime over the course of the next few years. As for its progress so far, Wells said Netflix is already about "one-third to halfway" to that ratio, having launched 2015 hours of original programming in 2015, and with the intend of achieving a further 600 hours by the end of 2016. The benefit for Netflix with a shift to self-generated content is that the licensing situation is much simpler, and the investment made represents a cost that continues to deliver value long after the initial spend. Licensing arrangements with outside TV and film distributors have a fixed term, and thus represent a recurring cost if you want to continue offering their content in your library.
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Netflix Wants 50% Of Its Library To Be Original Content

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  • by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Wednesday September 21, 2016 @09:15AM (#52930813) Homepage Journal

    What made Netflix great was selection. That's why they're so widely subscribed. The only way the ratio is going to look like that is if they're no longer carrying so much of everyone else's content. That won't be good for subscribers, who will get less for their money.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      What made Netflix great was selection. That's why they're so widely subscribed. The only way the ratio is going to look like that is if they're no longer carrying so much of everyone else's content. That won't be good for subscribers, who will get less for their money.

      It depends on how you look at it. Selection is great when you've not already watched all the material of interest, but to keep customers on board they need new content on a continuous basis. They also must keep their price low. So far, the market is speaking and it is telling Netflix that it likes original content. Netflix is very smart to continue this path.

      • It depends on how you look at it. Selection is great when you've not already watched all the material of interest, but to keep customers on board they need new content on a continuous basis.

        The thing is -- there are different types of "new" content. There's "new" content in the sense of "made recently." But there's also "new" content in the sense of "we didn't have this product before."

        When Netflix streaming first came out, I was hopeful that they'd keep doing more of the latter. There were lots of old, classic films, which I frankly prefer over a lot of new stuff. There are still several hundred old movies I'd be interested in seeing but haven't gotten around to it -- and those are just

        • Sure, it's very smart from the perspective of business and profits -- so far, it's catering to the majority of customers. The question is -- just how much is it worth to people to watch "House of Cards" and "Orange is the New Black" or whatever? How much will people put up with in dropping of other content and still pay prices for just a few shows?

          It depends on how many of those series are available and how good they are. You say 'just a few shows' but that is hardly what NF describes as its plan. The nice thing about original content is that the license does not expire, the more you make the more you accumulate. So at some point the scales tilt back to content increasing.

          Anyhow, what Netflix was is history. The entire world around them has changed. The competition, the market, and the supply chain. They could not survive on their original model.

      • Selection is great when you've not already watched all the material of interest, but to keep customers on board they need new content on a continuous basis.

        People expect Netflix to provide selection, and if it fails to do that then a substantial portion of their customer base will (finally) use some other service. Since they finally jacked up the prices for long-term subscribers to be the same as everyone else, there's no compelling reason not to switch; one can always switch back for the same monthly price.

    • by dbialac ( 320955 )

      Moves like this are why I canceled and switched to an ad-free Hulu subscription. It had reached the point where I was paying $9/month to watch Futurama, a few seasons of Top Gear (and not the good ones) and annually one self-produced show. For the latter, I figure I can subscribe for a single month when it comes out. Hulu, meanwhile, has almost everything that I watched that Netflix shed and shows they never carried (ex: Simpsons, Seinfeld, South Park, etc.).

    • What made Netflix great was selection. That's why they're so widely subscribed. The only way the ratio is going to look like that is if they're no longer carrying so much of everyone else's content. That won't be good for subscribers, who will get less for their money.

      I disagree, I don't subscribe to Netflix because of the ability to wade through a legion of TV shows and movies from he 1980s, 90s and early 00s. I wade through that shit and see little that I haven't watched already and very little I'd like to watch again. Then there is more recent third party material like Falling Skies which I watched on Netflix and liked but they unfortunately only had the first two seasons for some reason that probably has to do with legalities and changes in the corporate policies of

    • Netflix experienced a golden age where they were the only sensible option for making your content available for streaming and they offered enough additional exposure to make that profitable and desirable. But it's easy enough to cut them out and deliver the content yourself. You can make even more money selling an exclusive licence to Hulu, Prime, etc. Netflix can't offer a wide variety of content if no one is licensing it to them.

      Producing original content is actually the solution. If Netflix can say,

    • by CODiNE ( 27417 )

      They should pull a Google Books on the DVD industry and rip all those rental discs. Heck Google didn't need author permission, they can even argue an accessibility exemption as they add captions to everything. Say they're doing deaf and blind a favor by captioning and descriptive audio'ing historical content. If they're lucky they won't even have to write a check to anyone.

  • by kalpol ( 714519 ) on Wednesday September 21, 2016 @09:17AM (#52930827)
    From where will we obtain any given movie or TV show we want to watch that is not Netflix/Amazon/etc. original content? Right now the Netflix DVD service still has by far the widest selection - things like all the old British shows, old movies, all the stuff that is really desirable to watch but no longer is worth the cost to license it. I tried to find a copy of the 1960 version of the movie The Time Machine - only available via DVD from Netflix. Are we going to see a resurgence in the DVD service?
    • They're dropping a lot of old stock of DVDs. In fact, about 1/3 of my DVD queue is no longer available at all. It's true, though. They imagined a world where you could watch anything ever made on one service - and a lot of people bought into it. I'm still on the DVD service, but I'm finding that more and more back-catalog are available as one-time rentals from Amazon streaming for fairly cheap.

      There is still a lot of older obscure content that has yet to be released on DVD. Or newer content - Arrested

    • Are we going to see a resurgence in the DVD service?

      Conceivably. The online service is simply too expensive to maintain and as it is right now, not sustainable into the future. Subscription fees will have to rise drastically, content will have to fall dramatically or possibly both. The assumption has been that subscriber growth would rise enough to offset this but that has been nowhere near to happening. Unless Netflix can get a copy of DVDFab and rip all of their DVD rental stuff online.

      It sounds daft but Blockbuster's administrators might want to start

    • What they really need is the equivalent of buying a DVD for digital content. You can currently buy the DVD, and that gives you the right to rent it out, simply because you own it. The movie studios have no control whether or not you rent something else that you paid your own money for. There definitely needs to be a way for Netflix to purchase a license for any movie that exists and just stream it as much as they want, provided they only use a license for a single stream at a time. Owning a DVD should prob

      • by dgatwood ( 11270 )

        What they really need is the equivalent of buying a DVD for digital content.

        The problem is, then Netflix would not only have to keep all of their active content available for streaming, but also all of their historical content, just in case somebody bought it and wants to redownload it. I mean yes, they could have it on fewer servers, but still, it isn't clear how that benefits consumers over, for example, buying it from the iTunes Store's video section unless they can somehow convince the movie studios to

      • Compulsory licensing would also help internet radio, but the idea sure won't be popular with the media companies.
  • Netflix is becoming "just another TV network", becoming less of what everyone wants and more of what some people will pay for. Very depressing.

    • Re:Transformation (Score:5, Insightful)

      by alvinrod ( 889928 ) on Wednesday September 21, 2016 @09:36AM (#52930955)
      I think to a certain extent this is a response to existing TV networks or content creators souring on giving streaming deals to Netflix in preference of trying to build their own platforms or outright shunning the internet to keep their existing business model in place.

      If the movie studios or television networks aren't willing to license their content to Netflix either because they don't want people to stop watching TV or because they want to sell ads through their own streaming platform, what choice does Netflix have at that point beyond only being able to provide older less popular TV shows and B movies that don't appear to most of their audience?

      This leaves Netflix with the only real choice to start producing their own content so that they can sell subscriptions. In that way they're not that much different than HBO that started out as a movie channel and then got into making their own television series and a few original movies, only Netflix didn't start as a cable channel first. Now that HBO has done more to embrace internet streaming without requiring a cable subscription, they're almost in the same business.

      If you thought Netflix was going to ever become a one stop shop for all shows and movies you're out of your mind. The film industry saw exactly what happened when iTunes became the far and away dominant platform and how it meant an end to DRM in order to break Apple's hold.
      • If the movie studios or television networks aren't willing to license their content to Netflix either because they don't want people to stop watching TV or because they want to sell ads through their own streaming platform, what choice does Netflix have at that point beyond only being able to provide older less popular TV shows and B movies that don't appear to most of their audience?

        It's not that they don't want to license, it's just that from Netflix's point-of-view it's too expensive as their costs rise.

      • How to fix that? (Score:5, Interesting)

        by H3lldr0p ( 40304 ) on Wednesday September 21, 2016 @09:57AM (#52931089) Homepage

        Make television and movies like music with compulsory licensing? Say anything five years and older gets put into the pool of things that can be broadcast/streamed as part of your service as long as you pay the base royalties. Have the same sort of setup as music does but with a much finer grained reporting. That way everyone that should get paid, is paid.

        While five years seems a bit long, that's so streaming and rebroadcast doesn't cut too deeply into the DVD/BluRay sales. That should be plenty of time for that to go through the fans that really want their personal copy at release or to wait for the price to fall or discounted.

        And this doesn't stop anyone from making separate deals to get it before the five year date and/or add extras to their service like trivia, blooper reels, and so forth.

        Again, the point of copyright was to give people a chance to spread culture around before it is outright given away. Seeing as how locked up it's become, anything that speeds and ease of dissemination is a good thing.

        • While five years seems a bit long, that's so streaming and rebroadcast doesn't cut too deeply into the DVD/BluRay sales

          Studios used to wait six months between cinema release and DVD sales because they were scared that DVD sales would cut into cinema ticket sales. Now they often do simultaneous releases because they learned that if you don't make content available in the format that people want then they'll pirate it (and now we have large statutory penalties because it's hard to argue actual damages when you're refusing to sell the thing that's been pirated). People won't buy the DVD if they can't stream it, they'll eithe

          • by spyfrog ( 552673 )

            That has to be an American thing. I have never ever seen a DVD release at the same time as a cinema release here. To make things even worse - usually the American DVD release is about the same time that we can see it in cinemas here.

    • Their costs are simply too high and can't be covered unless they start drastically increasing monthly fees, and the only way people will pay that is if they drastically increase content, live TV, sports etc. The content costs are obviously a problem, but there's not much they can do about that, but their infrastructure costs are way too high and getting higher. Creating their own content is obviously a way to reduce long-term costs but a with lot of investment upfront. The trouble is, the reduced choice can
      • the only way people will pay that is if they drastically increase content, live TV, sports etc
        No - I won't pay an increased cost. That's why I got rid of cable.

        They are going to have to increasingly niche themselves or split out their content to multiple subscription options. There's no way I want to pay for more selection than I need. I'll just start buying DVD/Blu-Ray of shows for less money unless Netflix DVD has what I want.

  • by QuietLagoon ( 813062 ) on Wednesday September 21, 2016 @09:20AM (#52930845)
    Netflix has slowly, but surely, been reducing the breadth of its non-original content. It used to be that Netflix was the go-to streaming service. Now, with Netflix reducing the non-original content, Netflix is turning into just another cable TV channel.
    • I guess they'll revert when they realize that the vast amount of content they've offered was the reason for their success in the first place.

      • by nedlohs ( 1335013 ) on Wednesday September 21, 2016 @10:33AM (#52931375)

        They can't. The got in early enough that the rights holders of the streaming content licensed it reasonably cheap. That has all changed now that those holders have realized there's money in streaming and want a bigger slice of it.

        They're trying to transition to something that will work in that world. They don't really have a choice.

        • They're trying to transition to something that will work in that world. They don't really have a choice.

          I don't think there's much question of whether they're going to successfully transition to being one of many players. I think a more interesting question is whether anyone is going to step up to somehow unify these disparate services for the end-user, and if so who it's going to be. Due to the unique nature of internet delivery, it can be basically anybody... although obviously anyone who already owns a big CDN has a massive edge.

        • by AmiMoJo ( 196126 )

          It's like they don't want to make money. Do they really think people will subscribe to 20 different streaming services so they can all get their cut? People aren't going to subscribe to CBS's service just for Star Trek.

          • I think that's generally true, but Star Trek? If there were a new series, I'd subscribe to a separate service in a heartbeat.

            • by AmiMoJo ( 196126 )

              There is a new series starting early next year. In the US you can only get it if you subscribe to the CBS streaming service. In other countries Netflix is getting it, and if your country doesn't have Netflix... BitTorrent.

    • by swb ( 14022 )

      IMHO, when streaming started I'd say it had about a B grade in terms of content (quality + quantity).

      Over time, it seemed to go down to about C grade.

      Lately it strikes me that it's gotten marginally better, maybe B-.

      The question is whether they expand their original content significantly without shrinking licensed content to achieve a 50/50 mix, or whether they will expand moderately and shrink moderately to get there, or worse, expand slightly and shrink more greatly.

      The expansion of their original content

    • by Wulfson ( 548350 )
      More like the rights holders for that non-original content have been slowly but surely starving Netflix of content, bringing about this situation. Sure, I wish all that old stuff that I originally subscribed to see was still available, but I don't blame Netflix for not re-upping when the movie studios et al keep trying to eat all of their profit.
    • I've only been subscribing to Netflix for their original content. I can get most of the unoriginal stuff on my Prime account already.

      Many of their shows have been absolutely amazing. Game of Thrones level of awesome, in my humble opinion.

      Stranger Things (1 season)
      Daredevil (2 seasons)
      Jessica Jones (1 season)
      Narcos (2 seasons)

      I've binged all of these shows because they were that good. The only other show I've ever binged before this was The Wire. That says, to me, they have something special going on. If the

      • I've only been subscribing to Netflix for their original content. I can get most of the unoriginal stuff on my Prime account already.

        Many of their shows have been absolutely amazing. Game of Thrones level of awesome, in my humble opinion.

        Stranger Things (1 season) Daredevil (2 seasons) Jessica Jones (1 season) Narcos (2 seasons)

        I've binged all of these shows because they were that good. The only other show I've ever binged before this was The Wire. That says, to me, they have something special going on. If they can keep the good content coming at a decent pace, I have no problem with them dumping the same stuff I can get anywhere else.

        Bingo, their original content is available in every region where they operate without restrictions. In my region only about a third of the non-netflix stuff they stream in the US is not available because of existing distribution agreements the makers of that content previously made with local distributors. These are usually conventional cable TV companies, who charge exorbitant prices for the outmoded old TV system of showing one episode per week and where you have to subscribe to and pay for 100 crap chann

    • They were paying a lot of money for some very old shows that everyone's already seen. That might be quantity, but it's not quality where it counts for me - I don't really enjoy re-watching much.

      You also can't have a go-to streaming service when studios are going to make better money with their own streaming service. They sold a dream they can't fulfill, and let their DVD service rot in the process (which really did have almost everything imaginable at one point).

      • by dgatwood ( 11270 )

        You also can't have a go-to streaming service when studios are going to make better money with their own streaming service.

        Studios only think that they are going to make better money. The reality is that they might, but only in the very short term. The more studios go to that model, the more companies you'll have competing for a limited entertainment budget. Eventually, those studios are going to get squeezed, and viewers are going to start subscribing for two months to each one, then dropping them, and

        • Or, old content just isn't worth making available in that way at all. If $3/mo. of your subscription goes toward licensing for old content and you only care about a few shows, you're better off spending $36/yr. on DVD/Blu-Ray deals.

          It's new content that's going to be in larger numbers of niche venues. Recently, Seeso came out as a niche of comedy, standup and British sitcoms, and are only at $3.99 a month. It would take an awful lot of those subscriptions to be more expensive than cable, and you're effec

          • Or, old content just isn't worth making available in that way at all. If $3/mo. of your subscription goes toward licensing for old content and you only care about a few shows, you're better off spending $36/yr. on DVD/Blu-Ray deals.

            There's a substantial slice of the population that doesn't want to own discs. If they can't stream it, they'll most likely watch something else. This segment is growing as useful internet access reaches more potential customers...

            • Who cares if they don't want to own it? They don't have to keep it. If it's cheaper, it's cheaper. Letting the media companies tell you what you want to watch is not appealing.

    • Fees would have to rise and people really were upset at changes Netflix made in pricing before. They are trying to do as much as possible with the funds that they have.

      If copyright was SANE there would be a HUGE library of old programming available. If all the old junk isn't preserved, it would clearly be better content than the modern programming... (which is mostly junk.)

      The simple answer is that Netflix benefited by being the 1st. Today every major content owner can create their own service or make excl

      • by AmiMoJo ( 196126 )

        The problem is that it's all too spread out. If I could pay £8/month for everything I'd take that deal. If they want me to have multiple streaming services or cable with 10 different packages to get coverage, I won't.

        At best multiple streaming services will mean subscribing to a different one each month.

        The other massive problem is compatibility. My TV has an app for Netflix. It doesn't have one for Amazon so I don't have Amazon. App support for >1 year old TVs is even worse than updates for

    • by rhazz ( 2853871 )

      Netflix is turning into just another cable TV channel.

      In terms of producing their own content, but in most other ways their business model is far more consumer friendly than most of the incumbent cable channels and providers. Just the fact that their original content is globally licensed puts them miles ahead of HBO, which I cannot get in Canada without a $70 cable package. Netflix's existence has been a huge disturbance to the market in a very good way for consumers - just because they don't fix all the problems doesn't make them a bad thing.

    • It is noticeable as well. For last few months, I've found that I watch far more Hulu and Amazon than Netflix. Why? I don't care for the original content they are focusing on it. I just want to binge watch old TV series I like, or rewatch older movies. Netflix has been dropping those consistently, while Hulu and amazon are picking up the contracts Netflix drops. Same with kids shows...my kids have been steadily losing their shows on Netflix, and have started watching Hulu as well. If this keeps up, I will pr

  • by suso ( 153703 ) * on Wednesday September 21, 2016 @09:30AM (#52930905) Journal

    I started subscribing to Netflix in 1999. I became a customer because I wanted to be able to watch movies from a variety of studios, not just one. If I just wanted one studio, I'd subscribe to HBO. Notice how Netflix streaming doesn't have that good of content from other studios? Probably because studios realize that if they make agreements with Netflix, they will be working with and helping one of their competitors. Like Akbar said, its a trap.

  • Thats the only way to ever hit 50%.

  • Honeymoon's over, free market at work.

    Early Netflix, everyone was nodding their heads and saying "lol, sure, give us money and you can borrow our imaginary property" and cooing over li'l baby DVD kiosker. Now streaming is hype, Normals are streaming so hard it's the biggest bandwidth load on the tubes. Now the joke is "netflix and chill", and that's showing up in the contracts. Letting NF rent your imaginary property isn't some cute giggle anymore, it's a threat, if you do distribution yourself or use a
    • by spyfrog ( 552673 )

      But most people can't afford or simply won't pay for a dozen subscription. So if this is the plan that the media companies have for the future, they will go broke. It is as simple as that.

  • Most of what I watch on Netflix these days is their original content... Its generally well done and more intelligent than the hyper formulaic stuff TV stations churn out these days. 50/50 seems very drastic, but I would like to see more original content.
  • When I lived in Portland, Oregon, I used Movie Madness on Belmont St. It's the largest video store in the Northwest, if not the entire west coast. If you live in Portland, I highly recommend you use them and drop netflix.

    Now that I am retired in Bellingham, Washington, I miss them. Here in Bellingham, we have the Pickford Film Center, which is the only non-chain art cinema north of Seattle in Washington State. Between going there for movies and keeping busy with my multiple hobbies ans sports, I still hav

  • You want to go that way? Don't start series (ala Jessica Jones) and then abort them after one very successful season. Gives the false impression it wasn't well received.

    Staggering production times would help as well. Why should viewers wait for all the shows to start new seasons at the same time?

  • I'm torn on this.

    One the one hand, all of the Netflix original shows have been pretty damned good. Way WAY better than the average tripe on cable. So yeah, keep on keeping on.

    On the other hand, this is a clear conflict of interest. One company should not control the creation and distribution platforms. There's really nothing to stop Netflix from jacking their prices through the roof and holding the next season of *insert your favorite show* ransom unless you pay through the nose.

    I would love to see the co

    • Netflix doesn't control the creation process though. The production companies are separate from Netflix and partner to do the shows. This is how shows for network TV are also done.

      Look at what the production company of the amazing Stranger Things also did: https://en.wikipedia.org/wiki/21_Laps_Entertainment [wikipedia.org]

      Netflix is the one with first dibs, we'll just have to see in a few years if they syndicate their shows. House of Cards was their first big original, and that's only been out of three and a half years.

    • On the other hand, this is a clear conflict of interest. One company should not control the creation and distribution platforms.

      Uh, Dude? Where've you been? That used to be the case up until the mid-80s or so.

      The argument for the change was that the network TV model didn't work in the days of cable television. When you're one of only have 3 channels, you can be assured of a decent sized audience. When you're one of 100+ channels, not so much. Meanwhile, the studios showed their stuff on broadcast TV and then made money on the back-end with syndication and DVD, which the networks got none of. So the law was rescinded and networ

  • Pushing Netflix and HBO into the same shape. I suppose I'll see Netflix try for stronger DRM, and hopefully HBO gets more edge servers.
  • But I don't subscribe anymore because after their successful IP blocking this spring. All I can get access to now are my local version of Netflix. It sucked when they opened it and it still sucks. But I all fairness, it was going down hill for the American version too before I quit.
    Well, it had a good run.
    Right now I find plenty of stuff I like to see on Youtube.

  • At the rate they seem to be losing licensed content without a replacement, they'll accomplish their desired ratio without lifting a finger.

  • Their library is now small enough, do not cancel even more shows!

  • Well, Netflix is fast approaching a 50-50 split of content. The non-Netflix content outside of the US has always been abysmal and it isn't getting better - it is getting worse.

    So I guess Netflix doesn't really need to spend more on own content, they simply need to keep spending little on other content and that 50-50 split will soon be reached.

  • One of the reasons I was interested back then in Netflix was because of the old series and movies.. I'm not interested in most of they 'original content'..
  • Much of Netflix's original content is excellent. If they want to do more they can shut up and take my money!

  • They're going to have to start upping the quality of content. Their rude rip-off of the Brits' "House of Cards" has been a long, drawn-out mess, with none of the political logic in the original...and Spacey is LOUSY as a corrupt politician. We watch a lot more British shows than we do Netflix, and what we DO enjoy on Netflix are recent series we wouldn't otherwise get (think Miss Fisher's Mysteries, or Doc Martin).

    If they favor their own content, licensing will be cheaper, but they'll bear ALL the product

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