Netflix Continues to Lose Licensed Content; Subscribers Tiring of Library Exits
This won’t surprise long-time Netflix subscribers, but the streaming giant has been losing some of its best shows for a while now, and with interest waning in its original content the streaming service may be in trouble. Netflix's library is shrinking as licensing agreements end, which may leave the company best known as a content aggregator looking like a grocery store with little on its shelves.
According to data from Neilson's Top Ten report for the week of May 30 to June 5, Netflix’s original “Stranger Things” took the lead thanks to its recently released fourth season, but coming in a close second was The CW series “All American.” With second-hand programming such as “NCIS” and “Criminal Minds” also taking ranks in the top ten, much of the streamer’s viewership seems focused away from Netflix’s unique offerings.
While it’s fortunate that the streamer has so much of its library appearing in Neilsen’s Top Ten, there will be large holes in its programming when shows leave the platform as “Criminal Minds” did on July 1, switching over to the rival Paramount+ service. The idea to begin aggregating a huge library was initially a resounding success, especially when paired with the company’s push to create its own original content. As many of its initial ten-year licensing agreements wane, a large portion of Netflix’s most-watched content is returning home to appear on streaming services owned by their original studios.
From 2017 to 2022, Netflix rose to the content-creation challenge, increasing its “originals” library from fewer than 300 offerings to over 2,100 titles. Conversely, access to licensed shows and films dropped by almost 30% from 5,000 to approximately 3,700 options. While this shift towards original content appears to be a good idea, Netflix has spent the last 10 years acting as the go-to streamer for a wide variety of licensed content and its customers are beginning to miss all the movies and shows that brought them to the service in the fist place.
A recent Whip Media study seems to support that perception as only 62% of Netflix subscribers are either “very satisfied” or even just “satisfied” with the service. When compared to satisfaction rates for competitors such as HBO Max (94%) and Disney+ (88%), the OG streamer is definitely losing popularity.
The boost in viewership thanks to the fourth season of “Stranger Things” isn’t destined to last very long either. Netflix adheres to a binge-release strategy, dumping all episodes of a series at once, even though both “Stranger Things” and the final season of “Ozark” broke the season drops into two parts. This method allows viewers to consume content at their own pace, much like traditional licensed series that appear on the platform in a single go. Netflix’s head of scripted shows, Peter Friedlander, believes that single-day release schedules are key to retaining subscribers, giving them more options when interacting with shows.
The immediate drawback to this plan emerges as cord-cutters watch the entire season in a single viewing and then either unsubscribe or become frustrated that there is nothing left for them to look forward to. The hype surrounding a new release lasts only until the date it goes digital, slowly waning as interest dies down. Rivals Disney+ and HBO Max do the opposite with their latest originals including “Obi-Wan Kenobi” and “Westworld,” maintaining interest by promoting weekly discussions about their content that might ebb as a series concludes but not as much as with Netflix’s strategy. In addition, consumers may be more likely to cancel their Netflix subscription after a good binge, only returning when something attractive appears in its lineup in what has been described as “churn and return.”
Another drawback to Netflix’s dwindling licensed library can be seen in Fandom's State of Streaming survey. The study’s data suggests that the streamer has a problem with genre identity. Several of its competitors feature a particular style of content over other offerings, such as Paramount+ with science fiction thanks to its spate of Star Trek shows and Peacock being identified as the go-to for comedy. Netflix has little cohesion in its library, a situation that will only get worse as more of its signature offerings fly back to their original creators.
Streaming is quickly becoming the most popular way to view content, and more companies are moving to bring their original programming back into the fold. Unless it can make more headway with its original offerings, Netflix is going to be left selling a bunch of media that fewer and fewer people really want to buy.
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.