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Movies Television Entertainment

Netflix Licensed Content Generates 80% of US Viewing, Study Finds (variety.com) 107

Netflix is spending a pretty penny on original entertainment -- but while that stuff grabs most of the headlines, it's actually licensed titles like TV show reruns that still form the core of the company's streaming business. From a report: That's according to a data analysis from 7Park Data, which found that 80% of Netflix U.S. viewing is from licensed content with 20% from original shows like "House of Cards" or "Stranger Things." The firm also found that 42% of Netflix subscribers watch mostly licensed content (95% or more of their total streaming). Just 18% of Netflix's U.S. streaming customers are "originals dominant," whose viewing comprises 40%-100% of originals, according to 7Park. The data is for the 12-month period that ended September 2017.

Netflix Licensed Content Generates 80% of US Viewing, Study Finds

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  • by GrandCow ( 229565 ) on Monday April 16, 2018 @06:08AM (#56444797)
    Netflix original content now drives 20% of viewership.

    That's goddam amazing considering how long they've actually been making original content. OPs title tries to make this seem like a bad thing, it's not. Were they supposed to take 50% of all views within a couple years?
    • by rtb61 ( 674572 ) on Monday April 16, 2018 @06:22AM (#56444827) Homepage

      There is quite bit of difference between making content and paying a production house to make content for you. Still quite an impressive list https://en.wikipedia.org/wiki/... [wikipedia.org] and it goes on https://media.netflix.com/en/o... [netflix.com]. Of course http://www.news.com.au/technol... [news.com.au], NewsCorpse who own Fox, think it is a really bad idea, competing against their content is an extremely bad idea.

      Now that explains why Netflix went from friend to last millenniums content dinosaurs to being the enemy to be cut off from content (I dare say, the more popular Netflix become the more they wanted to charge Netflix, Netflix's response fine, we will make our own, see you at the bargaining table).

      • Of course the more popular Netflix became the more they wanted to charge Netflix. Netflix negotiates deals based on being able to show the content for X number of years. Lets say you own SuperAwesomeMovie 7, and you make a 3 year deal. You may assume that only 15% of Netflix subscribers will watch the movie, so you make a deal for 10 million dollars. If a year and a half into the deal, Netflix overall subscriber base tripled, you are now kicking yourself because your now only getting maybe 1/3rd of what yo

      • NewsCorpse doesn't have any content any more, beyond Fox News. They sold out to Disney.
        See: Walt Disney buys Murdoch's Fox for $52bn [bbc.com]

    • by ShanghaiBill ( 739463 ) on Monday April 16, 2018 @07:11AM (#56444951)

      Netflix original content now drives 20% of viewership.

      Up from 12% a year ago. So the OC portion of their business is growing rapidly. According to TFA, they spent $8B on content last year, but it doesn't say how much they spent on licensed content vs original content. Their 2017 revenue was about $12B, so 2/3 of that went to pay for content.

      • 67% growth year to year then... that is pretty amazing.
        Bet the rest of the content makers would hope for such explosive growth year over year.

        Combine that with making a sizable profit to boot and there-in lies a recipe for a new paradigm for how people consume content in the future.

      • Netflix original content now drives 20% of viewership.

        Up from 12% a year ago. So the OC portion of their business is growing rapidly. According to TFA, they spent $8B on content last year, but it doesn't say how much they spent on licensed content vs original content. Their 2017 revenue was about $12B, so 2/3 of that went to pay for content.

        In general their OC has been good quality programming. There have been some misses, but certainly a lot higher % of hits than network TV. The problem is though, that they are increasing OC at the expense of catalogue size. There are far fewer shows available than there used to be. I guess the benefit for them is that they don't have to "keep paying" to offer the content because they own it, so eventually their catalogue will be bigger.

        • by ArhcAngel ( 247594 ) on Monday April 16, 2018 @09:18AM (#56445317)

          The problem is though, that they are increasing OC at the expense of catalogue size.

          They aren't sacrificing anything. The studios they license content from are pulling content or increasing the the licensing terms to exorbitant amounts as they try to capitalize on Netflix's success or are terrified of it cannibalizing theirs...which in some areas it is. Netflix's OC of the Marvel characters was unexpectedly a huge hit. Which may explain why Disney is taking all of their content and rolling out their own competing streaming service.

          • by laird ( 2705 )

            Quite a few networks are pulling more and more out of Hulu and Netflix and into their own site/application, for strategic reasons. Think of it this way - if you're making content, would you want to set up Netflix as the gatekeeper to all of your viewers/content, or would you want to control your own distribution? So while it's a hassle for viewers (all in one place is nice) I think that more and more content is going to be pulled from the aggregators. This might be good for Apple TV, which provides a unifie

            • The problem with that is each content provider now wants to be paid directly. Meaning a show I was getting on Netflix is on another service which wants my ~$10 a month for access to their entire lineup when all I want is the one show they used to license to Netflix. If I watch 10 shows in total I am now paying over $100 month which was what cable cutting was supposed to prevent. I foresee a backlash in the near future where content providers will learn (they won't actually learn they'll just blame pirates)
              • by pnutjam ( 523990 )

                Meaning a show I was getting on Netflix is on another service which wants my ~$10 a month for access to their entire lineup when all I want is the one show they used to license to Netflix. If I watch 10 shows in total I am now paying over $100...

                Meaning a show I was getting on Netflix is on another service which wants my ~$10 a month for access to their entire lineup when all I want is the one show they used to license to Netflix. If I watch 10 shows in total I am now paying nothing and torrenting.
                FTFY

          • They aren't sacrificing anything. The studios they license content from are pulling content or increasing the the licensing terms to exorbitant amounts as they try to capitalize on Netflix's success or are terrified of it cannibalizing theirs...which in some areas it is. Netflix's OC of the Marvel characters was unexpectedly a huge hit. Which may explain why Disney is taking all of their content and rolling out their own competing streaming service.

            Every budget is a sacrifice. If you spend more creating original content, obviously you aren't spending that money on existing content. It very well might be true that providers are yanking content away or raising costs; but it's also true that Netflix is no longer as willing to spend as much on non-original content and their budget has been redirected. It's quite astonishing the lack of variety on Netflix compared to 10 years ago. It used to be if you remembered a show you once watched (or failed to wa

      • by Anonymous Coward

        That's not anywhere near as good as it sounds. They've been losing massive amounts of 3rd party content for years. It would be shocking if the portion of original content wouldn't be growing significantly when they've lost so much of the licensed content.

        The library has gotten pretty bad and the tools for finding other content is still just as terrible as always. They rarely, if ever, have the things that I'm looking to watch and I probably wouldn't have an account at all if I had to pay for it as the conte

      • But nobody indicates what % of the library is made of original content. If it's 5% of the library, it's performing really well. If it's 50% it's performing poorly in terms of viewership. Then of course their is the measure of cost/viewership but we can't even get that far with such basic information missing.
    • by zifn4b ( 1040588 ) on Monday April 16, 2018 @07:22AM (#56444973)

      That's goddam amazing considering how long they've actually been making original content. OPs title tries to make this seem like a bad thing, it's not

      Paid for by your friends at the cable companies. We're just looking out for your best interest which is paying 10x the premium for less quality content and don't forget our wonderful advertisements!

    • by Bengie ( 1121981 )
      80% of what I watch on Netflix is "Netflix original", but 80% of what I watch is not on Netflix.
  • Duh? (Score:5, Insightful)

    by TFlan91 ( 2615727 ) on Monday April 16, 2018 @06:11AM (#56444801)

    Most of Netflix's content is licensed material, it would make sense that viewed content matches the same rough estimate of percentages.

    I mean, they say it themselves, Netflix is *pushing* their original content and ramping it up. The numbers in those campaigns start low and then get high.

    Who watches House of Cards or Stranger Things more than once, twice at most, in a given decades span of time, and this survey was 12 months long.

    • not quite. the long tail effect suggests that the majority of your content could never be bought, but you can still make a profit as there are no costs involved with keeping old content

    • by Anonymous Coward

      I'd watch more original content if they voice-dubbed the non-English movies instead of just having English subtitles.

      • I switched 3% to Portugues on my Apple TV to watch it in Portugues instead of the lame dubbed version they had. Just put the english subtitles on so my wife could follow along.

        Not a big fan of dubbed things except when it is Anime or something.

    • by jon3k ( 691256 )
      This honestly looks like a hit piece. The fact that 20% of the content viewed on Netflix is Netflix original content is amazing, and growing very fast. I'd love to know what percentage of content Netflix's content represents out of the entire library. Probably a fraction of one percent.
  • by jools33 ( 252092 ) on Monday April 16, 2018 @06:19AM (#56444817)

    OK, but what does Netflix Original mean?

    Currently I'm watching "Requiem" - a Netflix Original (according to Netflix), that I last noticed running on the BBC (BBC Wales), and was produced by the BBC, and was on BBCiplayer. So not really originally Netflix or?

    • by Anonymous Coward on Monday April 16, 2018 @06:31AM (#56444841)

      Netflix participates in production of original material, but also the other parties have rights of ditribution.

      Only a part of the netflix original content is netflix exclusive.

      in other words:

      original != exclusive distribution.

      • by jools33 ( 252092 )

        OK, thanks for the explanation, it clears up the definition a lot.

      • Netflix participates in production of original material, but also the other parties have rights of ditribution.

        Only a part of the netflix original content is netflix exclusive.

        in other words:

        original != exclusive distribution.

        No, they use the "Netflix original" for exclusive content they had NO part in producing. I have seen it applied to shows made in the 1980s.

        • for example....?

          • for example....?

            I saw it in Denmark when visiting. An old series for a local Danish tv-station was on Netflix marketed as Netflix original. It even still had the original TV station's logo in the corner (because old crappy content).

            I don't see stuff that old regularly, but for content with "Netflix Original" moniker that Netflix had no part in producing, there is a small subset of a few hundred of them here: https://en.wikipedia.org/wiki/... [wikipedia.org]

            These television shows, even though Netflix lists them as Netflix originals, are s

          • Stranger Things
        • Netflix participates in production of original material, but also the other parties have rights of ditribution.

          Only a part of the netflix original content is netflix exclusive.

          in other words:

          original != exclusive distribution.

          No, they use the "Netflix original" for exclusive content they had NO part in producing. I have seen it applied to shows made in the 1980s.

          Hulu does this too. It's funny seeing shows that I watched play originally on the BBC being labeled as "Hulu Original" or "Netflix Original" years later in the US.

      • Netflix also provides funding for shows that may have begun on another network, but lost funding or whose target audience might be better served on Netflix. Basically they sometimes take a syndicated show that got cancelled and carry it on. I've seen it a couple times, but I can't at the moment remember where.

        • by Anonymous Coward

          Longmire

        • by laird ( 2705 )

          They do tons of this with anime - presumably Netflix has a strong anime audience (my daughter, certainly) and I see tons of Japanese anime as "netflix original" - with Netflix credited in the show's credits. So perhaps Netflix licensed the content and paid for subtitling or something? I'm pretty sure that the programs were produced long before Netflix was involved.

          Then there are shows like Travelers, which were produced internationally, where Netflix picked up the show for the first season, and helped fina

      • by swb ( 14022 )

        Just what does "participate in production" even mean?

        My guess is that mostly how Netflix operates is by just buying content from production companies that actually produce the shows (ie, cast, film, edit, etc). The non-American productions are probably just cash infusions.

        I'm sure Netflix is building out their own production house, but there's a finite amount of available production talent and going to the extent of creating a full-service production company (sound stages, technical crews, post facilities,

    • OK, but what does Netflix Original mean?

      Currently I'm watching "Requiem" - a Netflix Original (according to Netflix), that I last noticed running on the BBC (BBC Wales), and was produced by the BBC, and was on BBCiplayer. So not really originally Netflix or?

      They use the term for both original and "exclusive" content. So it just means that no one else is running it at the moment in that area of the world...

      Yes, they are intentionally lying and lying poorly.

      • Lying seems a bit over-used in such a case. Parsing.

        • Lying seems a bit over-used in such a case. Parsing.

          Are you claiming it the term is correct or that they are not aware they using it incorrectly?

          It is not a big lie, but it is a lie.

          • I would say they are using the term more broadly than they should to keep with their marketing/branding of things. Basically, it is stuff Netflix spent a lot of money to make or have in their walled garden.

            They have a label "Netflix Original" and they are applying it to 1. things they make themselves.... 2. things they they didn't start out making but are continuing production on and 3. Old dead series they outright buy and can only be viewed on Netflix.

            "Netflix Originals" in essence is a marketing term t

    • OK, but what does Netflix Original mean?

      Currently I'm watching "Requiem" - a Netflix Original (according to Netflix), that I last noticed running on the BBC (BBC Wales), and was produced by the BBC, and was on BBCiplayer. So not really originally Netflix or?

      I've seen similar labeling on Amazon Prime Video. An "Amazon Original" that I swear first aired somewhere else.

      • Yep.... Netflix and Prime and Apple are buying up content and repackaging and also producing their own.
        Pretty soon there will be a bunch of fiefdoms where all the content will be locked away in exclusive domains and to have access you will have to pay the gatekeeper.

    • I think Netflix buys into the production. Sometimes they just buy out an already popular show and take over production for the future. This has happened for some shows that were about to cease being produced, but Netflix picked them up and extended their production.

      Reminds me of the rebranding at Trader Joes. If a product is very successful in their store.... then they will repackage it and sell it in their store, but under their own label.

      Most Original content is all Netflix however.

      So far their content is

    • After the fiasco with The Little Prince [wikipedia.org] I got the impression that a "Netflix Original" is something they have exclusive rights to in the United States, and that the term isn't any more specific than that.

      A description of the little prince fiasco: an adorable animated movie released July 2015 by Paramount... in France. They dropped the ball a week before they were supposed to release in the United States (after advertising october, december, february, and finally may), and Netflix bought the US release right

  • What really matters is what percentage of Netflix subscribers decide to (re)subscribe due to the original content. Presumably, this will reach a point where it's profitable rather than dropping original content creation entirely. Alternately, luring away directors/actors/producers gives them leverage over the rest of Hollywood. If everyone with talent starts working for Netflix then who's going to make the next theater blockbusters? Not sure they can really pull that off, though, either.

    • I think OC is also about keeping the subscribers one has.
      Subscribers stay put the more there is a steady flow of content.

  • by Anonymous Coward

    I wonder what the % would be if Netflix actually had all content available.

  • there is much more licesed content available at this point, so the choice is bigger and the chance that you watch licensed content is higher.
    for me, i think it's 50/50, i find the netflix shows very good and mostly only watch licensed content together with my wife.

  • by Anonymous Coward

    Netflix killed it halfway through watching.

    • Netflix killed it halfway through watching.

      Probably for the best. Chuck was a great show in the early seasons, but each season got progressively of a lower quality. Netflix probably saved you from the last few seasons, which, honestly, probably shouldn't have been made.

      • by gnick ( 1211984 )

        ...each season got progressively of a lower quality.

        Watch it backwards. That's what I'm doing with The Office. It really picks up when they introduce Michael and then keeps getting progressively better.

        • ...each season got progressively of a lower quality.

          Watch it backwards. That's what I'm doing with The Office. It really picks up when they introduce Michael and then keeps getting progressively better.

          That's an interesting idea. But only if watching last episode first... watching the contents of an episode in reverse might be annoying, especially trying to understand what they're saying.

  • by gravewax ( 4772409 ) on Monday April 16, 2018 @07:07AM (#56444937)
    Those aren't bad numbers, they are bloody astounding given how small a percentage the original content is of the entire library. That pretty well confirms that their strategy has been highly successful which I am a little surprised at as there really isn't that much original stuff that is any good.
    • What percentage is original content. It's driving me bonkers that I can't find those numbers. Without them, this whole discussion is a waste.
    • Before you look at it on terms of percentage of library maybe consider looking in terms of percentage of costs. If I were an investor I would be alarmed at this considering the expense.

      • own content is far more valuable as it is immune to being screwed over by licensing deals (like those that Disney are currently screwing them with) and it can be onlicensed to other providers. If I was an investor I actually much prefer seeing the fate in their own hands rather than the hands of their competitors.
        • own content is far more valuable

          You should see my holiday videos.

          Does that scare you? It should. They are horrible. And my point is that own content is not valuable at all if it isn't watched. If you were an investor the increasing gap between profit and revenue despite the increasing subscription fees should alarm you. It isn't something that can survive on "we make a loss on every unit sold but we'll make it up in volume" kind of scenarios.

          Netflix needs viewership of their own content otherwise along with a large expense the net result

          • and viewership of their own content is what they have. These numbers are very good. What they have traditionally struggled with is the escalating costs of licensed content where they have zero control, huge risk and ongoing exposure to deal changes AKA Disney. the own content is a direct result of those increasing costs risks and margin attack which would ultimately lead them to a death that is not in their control.
            • and viewership of their own content is what they have. These numbers are very good.

              ... I don't know how you can justify that post.

  • by Anonymous Coward

    Netflix doesn't share this information. Which makes me wonder how they source their data, even they say it only includes desktop viewing, and excludes mobile and connected tv type viewing, which I imagine is now the bulk of Netflix's views.

    They don't include margin of error and scant details on methodology, which makes me wonder how close I'd be to their accuracy if I pulled a number from my arse.

  • New York-based 7Park Data, founded in 2012, is backed by investors including Mueller Ventures. The company sells data tracking Netflix, Hulu and Amazon VOD viewing to clients across the entertainment industry including studios, TV networks, production companies, and talent agencies.

    It is absolutely stunning that a company whose clients include a lot of studios would produce a study that reassures studios that the bulk of Netflix users are watching studio properties.

    It's also kind of amazing how absolutely devoid of any hint of methodology 7park's website is. They go on about "Streaming Audience Intelligence" and how it'll do everything short of blowing your dog, but never explain anything about how it's supposed to work other than some creatively worded statements that say it's bette

  • I subscribe to Netflix for one, maybe two at the most, months out of the year. During which time I watch all the original/exclusive Netflix content I care to and then unsubscribe. Puts me near 100% viewing of Netflix only content. It's pretty much the same thing I do for HBO Go and Sling TV (for ESPN during college football season). With a plain ol' antenna for OTA local channels, it works great for me. Plus I never complain about $100-200 per month "cable" bills.
  • What*s the percentage of original content in the Netflix catalogue. I doubt it's anywhere near the 20% it generates in revenue.
    • See above. Roughly 5% is original titles, depending on how you define 'original'. If we're counting hours, it would be far less.
  • I'd be pretty impressed if 20% of what the cable company carried was produced by them.
  • No non-original Netflix content is not the 80% of *all* US Viewing.

    Among Netflix customers original vs non original viewing splits 20 - 80.

    • by mysidia ( 191772 )

      The author of the article misses the point.... licensed content will likely ALWAYS be a majority of Netflix's viewing --- Original content is not a replacement for the licensed stuff, in the sense that they need movies from other studios in order to have a reasonable selection; However, by having an increasing amount of Netflix Original content they are increasing the barriers against a competitor very easily starting a comparable service and just licensing all the same stuff non-exclusively, AND

      • > AND Netflix Originals also gives potential-cord-cutters on the fence an independent reason to consider Netflix even if they keep TV and keep buying movies, because there will be stuff they can't watch on TV without Netflix.

        I guess you missed the news last week [reuters.com] -- Comcast announced will be bundling Netflix:

        In a statement on Friday, the companies said Netflix will be available later this month through various Xfinity TV packages delivered through Comcast's X1 set-top box.

        If I'm reading that right it soun

      • by laird ( 2705 )

        Exactly - the licensed content is essentially the same on Netflix, Amazon, Hulu, Apple, etc., because _anybody_ can license network content, pretty much. The exclusive content is a big differentiator - you have to pay for Netflix/Apple/Hulu/Amazon to get their original and exclusive content. So even if it's a small percentage of what people watch, it may well be a large factor in how people decide which streaming service to subscribe to.

  • This is completely useless without knowing how much of their content is originals. If originals only make up 5% of their total content, this is a freaking incredible number as it shows it is blowing out most of the other content. On the other hand, if it is 50% of their content, these numbers are terrible. As it is, this metric is useless without more information.

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