Older Companies' Message To Netflix: We Want Our Shows Back

Over the next few years, Netflix stands to lose content rights representing as much as 40% of its viewership, according to an analysis by The Wall Street Journal.

The content in question comprises off-network series such as “The Office” and “Friends,” which have emerged as popular attractions for Netflix, often accounting for more “viewing minutes” than Netflix’s original content, according to the WSJ report published last Thursday.

The TV industry’s most prolific content producers have long licensed some of their highest-profile hits to Netflix. But now, as three of these suppliers gear up to launch and build subscription streaming services of their own, they may be in a frame of mind to yank their content from Netflix in order to offer it on their own services, the WSJ story suggests.



The three companies mentioned in the WSJ story are Walt Disney Co., WarnerMedia (AT&T) and NBCUniversal (Comcast). Among the properties from these companies that do well on Netflix are “Grey’s Anatomy” (Disney), “Friends” (Warner) and “The Office” (NBCU).

The Journal story characterized “The Office” in particular as Netflix’s “No. 1 show.” The story cited unnamed sources in breaking the news that NBCU is engaged in “internal discussions about removing ‘The Office’ from Netflix when the contract expires in 2021.”

“Nonoriginal ‘library programming’ made up 72% of the minutes people spent watching Netflix in October,” according to Nielsen data analyzed and reported by the Journal. “That means reruns, and most of them are made by Netflix's rivals,” the story pointed out.

In other words, this “nonoriginal” programming is more popular on Netflix, in terms of time spent viewing, than the streaming service’s originals such as “Stranger Things” and “Ozark,” the WSJ story says.

TV companies (i.e., studios that make the shows) have long sold their intellectual property through their syndication and distribution units to just about any entity that has enough money to pay for it.

For example, “The Office” is currently seen on Netflix, on Comedy Central (in a non-exclusive cable deal) and on Cozi TV, the broadcast “diginet” (subchannel) that is part of the NBC Owned Television Stations division of NBCU. So it is not as if NBCU is worried about over-exposing this TV show.

On the contrary, the company wants to benefit itself from the show’s exposure. If “The Office” is a huge draw, or entry point, for Netflix subscribers, then NBCU figures it could be just as valuable for them, the very company that made and owns the show.

Netflix currently offers a varied selection of off-network content -- from “Frasier” to the original “Twilight Zone” and “Star Trek.” In the Journal story, Netflix’s position on the issue of “viewing minutes” was to point out that these older, off-network shows such as “Friends” have far more episodes than, say, “Stranger Things.” So, naturally, anyone who chooses to binge-watch “Friends” will expend more viewing minutes doing so than watching “Stranger Things.”

But therein lies the point. TV shows that run for multiple seasons on mainstream television, where they are nurtured and promoted by TV networks, have an inherent value that has not been equaled by originals produced in recent years for streaming services (or basic or pay cable either).

By taking back their most valuable shows, the older entities now getting into streaming have come upon a powerful weapon in their competition with Netflix.

In the WSJ story, “Friends” co-creator Marta Kauffman offered her view of why her show is still popular. Said she, “It’s not dark. It’s not twisted. It’s not about corrupt people. It’s comfort food.” She makes a point worth thinking about.

3 comments about "Older Companies' Message To Netflix: We Want Our Shows Back".
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  1. Ed Papazian from Media Dynamics Inc, April 29, 2019 at 10:05 a.m.

    Regarding those old shows with lots of episodes, ever since "off-network" reruns like "Star Trek", Perry Pason", "I Love Lucy", and countless others began airing on independent stations in the 1960s and on cable channels more recently, it has been evident that the repeats often develop newer---and younger---audiences than they attained during their network runs. If nothing else, this should be a concern for Netflix as the reruns have a life of their own and they are constantly garnering hosts of new fans who never saw them in their original outings or even later when they first went into syndication. Many of these younger folks who will now watch the reruns on rival SVOD outlets are the core of Netflix's current subscriber base. Food for thought?

  2. Steve Sternberg from The Sternberg Report, April 29, 2019 at 2:36 p.m.

    I think tthat even though Friends and The Office might be Netflix's most viewed shows, most people get Netflix for original series, not off-net stuff.  Once they get it, they start watching a lot of other things.  So I expect that it might be annoying to lose Friends, it probably won't contribute much to churn.  On average, viewers willspend less time with aNetflix, but it won't inhibit subscriber growth much.

  3. Eric Fischer from HJA Strategic Consulting, April 29, 2019 at 5:06 p.m.

    NFLX will not exist in seven years.  This is why.  Content will be aligned vertically with parent company and their original production budget is not profitable.

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