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

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.

Comments

Sure they do... wait, no

[drinkypoo]

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:Sure they do... wait, no

[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.

So where will existing content come from?

[kalpol]

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?

So long, Netflix, it was good while it lasted

[QuietLagoon]

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.

Re:So long, Netflix, it was good while it lasted

[nedlohs]

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.

Re:Transformation

[alvinrod]

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.

Re:Heading the wrong way

[Oswald McWeany]

Same is happening everywhere. Here in the US, you need Hulu if you want to watch "the Path". Amazon if you want to watch "Man in High Tower". I think Netflix is currently the only place for "Peaky Blinders" or "Luther". New Star Trek is going to be on CBS all Access. My wife's stupid ABC shows are going to be on Yahoo video. Meanwhile BBC is slowly pulling all their content from existing distributors and are setting up their own streaming service - so will need that for Doctor Who or Top Gear.

You have to pick or choose which shows you care to stop watching OR just go back to subscribing to the bloated service that was cable TV because it's getting to the point where the prices are even if you want a good selection of shows.

I miss the days it was just Netflix and Netflix had just about everything.