When Netflix first moved to a digital platform, no one could’ve imagined that the company would one day set a new precedent in the entertainment industry. With cable companies losing subscribers and dollars by the millions, many networks are establishing their own streaming services. But what does this mean for the future of Netflix?
Aside from more streaming services to compete with, these networks can also pull all of their licensed content off of the Netflix platform. A mass exodus of licensed shows and movies could result in a total loss of around 20 percent of their streaming content. According to Business Insider, this could eliminate close to 80 percent of what subscribers are watching regularly.
Those lost hours of popular viewer content could cripple the streaming service, leaving Netflix largely dependent on their own content to keep and attract customers. Networks could also make the decision to allow Netflix to continue using their licensed content—for a much higher price.
Netflix demonstrated just how far the company is willing to go to hang on to popular shows recently, when the company paid AT&T/WarnerMedia $100 million to continue airing “Friends” in 2019. With so much riding on licensed content, Netflix will need to come up with a strategy to stay ahead of the losses.
Fortunately, Netflix execs had anticipated the issue, and have spent between $12 and $13 billion on content creation and retention for 2018. They hope that the release of high-quality original content will be enough to bridge the entertainment gap and hold consumer interest.
Disney has already announced the creation of their own streaming service, and may use their acquisition of Fox to beef up its content library. Pixar and Marvel will almost certainly be pulled from the Netflix lineup sometime next year, and other networks could follow suit. Rumors indicate that Comcast and AT&T/WarnerMedia will be making a similar move to harness their own licensed content before the end of 2019.
The future of Netflix and smaller streaming services will largely depend on how these big networks price their services. And whether consumers are willing to pay several different bills just to keep access to their favorite movies and shows. Without the use of licensed content, streaming services could be facing a content famine that will leave them struggling to meet subscriber demands.
All signs currently point to 2020 as the tipping point that will determine the availability of licensed content across multiple platforms, and the future of the streaming industry as a whole.
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