Netflix is better placed to determine its own fate, thanks to a strategy that has seen the streaming giant invest heavily in original productions, reducing its reliance on movies and series from outside companies, particularly the U.S. studios.
According to a report published Thursday by Ampere Analysis, the percentage of original movie and TV season titles on Netflix’s U.S. service nearly tripled from 2016, when they accounted for just 4 percent of the catalogue, to 11 percent by the end of 2018.
More significantly, the majority of new titles released on Netflix — the films and shows that drive viewership and subscriber growth — are now produced or co-produced in-house. In December 2016, just 25 percent of titles released less than a year before were Netflix originals, with the vast majority acquisition titles. By December 2018, according to Ampere, the percentage of originals had doubled to 51 percent. This contrasts with SVOD competitors Hulu and Amazon, which, while increasing the number of originals they produce, still acquire the vast majority of their content. Original series and films make up just 1 percent of their online catalogues.
But Netflix still lags behind services such as HBO Go, which has a catalogue of around 35 percent originals content; and Showtime Anytime, with around 15 percent originals in its online library.
Lottie Towler, an analyst at Ampere, thinks Netflix’s approach puts the streamer in a strong position compared to its rivals, which are still dependent on the studios for content. Fox and Disney — which in a bid to challenge Netflix’s online dominance this week completed their $71 billion merger to create a new mega-studio — have already begun to pull their content off Netflix.
Other majors may follow suit as they roll out their own Netflix-killer apps worldwide.
“Netflix’s strategy is clearly moving toward a self-sufficiency model. Its focus on growing the proportion of original content in its catalogue shows no sign of slowing down — in fact Ampere’s analysis shows the streaming giant is reaching a point where it produces almost all the new and fresh content, while only the older content is licensed,” says Towler. “This will position Netflix well in the market should other major studios follow in the steps of Fox and Disney and pull their content from SVOD services in advance of launching their own direct-to-consumer offer.”
Ampere’s report found that content from the U.S. majors still accounts for 30 percent of Netflix’s U.S. catalogue.
In addition to greenlighting more in-house productions, Netflix has increased the number and volume of series it picks up exclusively for its service worldwide. Shows like Star Trek: Discovery or Peaky Blinders, which Netflix does not produce but brands as originals for its global subscriber base.