Netflix Has Effectively Won the Streaming Wars, but It Wasn’t By Spending Billions on Originals
Netflix’s licensed catalog continues to punch above its weight in terms of demand, and being first to the marketplace has helped it immensely.
It’s Netflix’s world, and we’re all just living in it. Ok, that might be an oversimplification, but not by much. Netflix is the world’s largest streaming platform, and at this point, it isn’t particularly close. The service reported its second-quarter earnings earlier this month, and in that report, it revealed a subscriber total of nearly 278 million customers. A rich content library is key to Netflix’s success, and new data from Parrot Analytics shows how the method Netflix uses to blend originals and licensed titles has helped it slay the streaming competition for so many years.
Key Details:
- Netflix originals accounted for 25% of all streaming originals in the second quarter of 2024.
- Titles licensed from broadcast TV channels make up 1% of Netflix’s catalog, but drive 7.1% of total demand.
- Netflix established a reputation for quality originals from the beginning, and its shrewd licensing decisions have left competitors no choice but to do business with it.
Parrot’s data shows that Netflix continues to churn new titles through its massive content pipeline. It accounted for 25% of the world’s streaming originals in the second quarter of 2022, a key figure as originals help drive new subscriptions and let customers tell different services apart from each other. Prime Video had the second-highest share of originals during the quarter with 9%, while Disney+ took a distant third at 4%.
A greater supply is helping create a greater demand for Netflix, as well. Of all demand generated by streaming originals last quarter, 32.9% was driven by a Netflix show. This clearly demonstrates that its customers think highly of the streamer’s original content and that they believe the service is a good value relative to its monthly subscription price.
But it’s not just originals like “Stranger Things” and “Bridgerton” that are driving demand on Netflix. The streamer maintains a large library of licensed titles from media companies all over the world, and this too has paid off handsomely. Parrot measured how much demand each of the top streaming services on the market sourced generated for their shows and movies, and where they came from. It found that while nearly half of the demand for Netflix shows was generated by its originals, 7.1% was created by series licensed from broadcast networks. That figure may not seem all that impressive until you consider that only 1% of Netflix’s library is comprised of these shows.
Over the years, Netflix has scored big with its lineup of shows pulled from broadcast channels like NBC, CBS and others. “The Office” and “Friends” both had memorable stays on Netflix in the past, and now shows like “Seinfeld,” “NCIS” and “Grey's Anatomy” are continuing the tradition, and helping to keep viewers engaged between the release of new originals.
A Leader From the Beginning
The data is yet another point that underscores how Netflix grew to become the largest streaming service in the world. Being first to the market helped quite a bit; Netflix first began streaming video online in 2007, months before Hulu became available to the public. Originals followed a few years later, and early Netflix shows like “House of Cards” and “Orange is the New Black” served notice to cable channels that streaming wasn’t just for old movies anymore, even if viewers were still watching them in droves.
It also helped viewers to start thinking of Netflix as a premium TV brand, as well as a place to go and stream their old favorites. By the mid-to-late 2010s, when legacy media companies were considering streaming services of their own, Netflix had already built a commanding lead. Now, even Netflix’s biggest competitors like Disney and Warner Bros. Discovery will make licensing deals with Netflix, because refusing to do so and trying to out-earn Netflix by keeping all in-house content on their own streamers has proved ineffective.
The Streaming Wars were an effective narrative for media types like myself, but in a sense, they were over before they even began. Netflix set a blueprint that others have consistently struggled to follow because none of them could improve on any of the things it did best. Netflix was first to the streaming marketplace, and its ability to merge licensed content with high-quality and high-demand originals has kept it firmly at the top of the heap.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.