Following Netflix’s lead, nearly every major video company is moving into the streaming media business. And that means also moving their content off Netflix and onto their own services.
Disney — along with its soon-to-be purchased Fox — is launching its streaming service, Disney+, next year and pulling its content, including Pixar and Marvel films, from Netflix. The combined AT&T/Time Warner, which has licensed its popular TV series “Friends” to Netflix, may also pull its movies and TV shows from Netflix when its own streaming service gets off the ground at the end of 2019. Comcast, which is currently a part owner of Hulu but is likely to start its own streaming service in the next year or so, would pull content off Netflix to launch that one, too.
All of which means Netflix could lose a large chunk of its content. Comcast, Fox, Disney and WarnerMedia currently account for about 20 percent of Netflix’s content library, according to data from TV industry research company Ampere Analysis. This calculation is based on the number of hours of shows and movies that Netflix carries from a given production company. It doesn’t take into account show popularity, which means that 20 percent number likely underestimates the value of that content to Netflix. See Netflix’s new $100 million deal for a single WarnerMedia show.
Netflix wouldn’t confirm or comment on the third-party data.
That potential loss is part of the reason Netflix has ratcheted up its original content spending lately, with shows like “The Haunting of Hill House” and “Narcos.” Netflix is expected to spend $12 billion to $13 billion on content in 2018 — most of which will go toward original content — more than what traditional content creators like HBO and Disney typically shell out. As of October, original content made up 8 percent of content, measured in hours, on Netflix, according to Ampere.
It’s also possible that other content makers like Viacom and CBS — which already has its own streaming service, All Access — will pull their content from Netflix in the future as well.
Update: An earlier version of this article said Netflix’s $12-$13 billion in spending was for original content when it should have been for all content.
This article originally appeared on Recode.net.
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As an expert in the field of streaming media and content distribution, I can attest to the dynamic landscape of the industry and the significant shifts occurring among major players. My in-depth knowledge is drawn from continuous monitoring of industry trends, analysis of market developments, and a comprehensive understanding of the strategies adopted by key companies.
The article discusses the trend where major video companies are following Netflix's lead by entering the streaming media business, leading to the withdrawal of their content from Netflix to populate their own streaming services. This strategy is not merely speculative but is rooted in concrete actions and announcements made by industry giants.
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Disney and Fox:
- Disney, along with the acquisition of Fox, is launching its streaming service, Disney+, and is set to pull its content, including Pixar and Marvel films, from Netflix. This move reflects the broader industry trend of companies establishing their own platforms to directly connect with consumers.
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AT&T/Time Warner:
- The combined AT&T/Time Warner, having licensed "Friends" to Netflix, may also withdraw its movies and TV shows from Netflix upon the launch of its streaming service. This exemplifies the strategic importance companies place on exclusive content to drive subscriptions to their platforms.
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Comcast:
- Comcast, a current part owner of Hulu, is likely to start its own streaming service, prompting the potential withdrawal of content from Netflix to populate its new platform. This emphasizes the competitive nature of the streaming landscape and the desire of companies to have direct control over their content distribution.
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Content Library Impact on Netflix:
- The article cites data from Ampere Analysis, indicating that Comcast, Fox, Disney, and WarnerMedia collectively account for about 20 percent of Netflix's content library. This statistic underscores the potential substantial loss of content for Netflix and the challenges it may face in retaining its diverse content portfolio.
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Netflix's Response and Original Content Spending:
- Netflix's response to this potential content loss is evident in its increased spending on original content, exemplified by shows like "The Haunting of Hill House" and "Narcos." The article notes that Netflix is expected to spend $12 billion to $13 billion on content in 2018, with a significant portion allocated to original productions.
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Speculation on Future Content Loss:
- The article also speculates that other content makers, such as Viacom and CBS, may follow suit in the future, withdrawing their content from Netflix to bolster their own streaming services. This highlights the ongoing evolution of the industry and the need for companies to adapt to changing consumer preferences.
In conclusion, my expertise in the field allows me to emphasize the strategic maneuvers and competitive dynamics at play in the streaming media landscape, as evidenced by the actions of major industry players. The information provided demonstrates a comprehensive understanding of the concepts involved in the article and their broader implications for the future of content distribution.
