Are Netflix Originals Really More Popular Than Licensed Content?

Posted: Apr 18 2019, 3:46am CDT | by

 

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Are Netflix Originals Really More Popular Than Licensed Content?

Fandom Debates: How Popular Are Netflix Originals?

Netflix is on a roll. According to a report from Deadline.com, in 2018, more than half of new Netflix titles were platform originals, with 51% of new titles produced in-house and 49% acquired from outside producers, and this is the source of a lot of controversy. In particular, ratings professionals are up in arms about whether or not Netflix originals are more popular than acquired titles. Netflix claims they are - but a closer look at their calculations presents a more complicated story.

The Rise Of Originals

Netflix has been creating small amounts of original content for years, but in the last two years it’s become a major focus of the platform, and they’re raising prices as a result. After all, you can’t recruit top developers, producers, and showrunners like Shonda Rhimes without spending big. Other affiliated show developers include huge creators like Warner Bros. as well as small companies like Tornante, but even such relative unknowns can come at a cost. Tornante, which makes Bojack Horseman, is run by former Disney chief Michael Eisner.

The Problem Of Popularity

One reason it’s so difficult to determine whether Netflix originals are the most popular shows is that different ranking systems rely on different approaches. For example, in 2018, original content claimed the top viewing spot in 48 of 50 states, with The Haunting of Hill House and Lost in Space dominating the rankings. But, while these shows may own the top slot, this calculation leaves out a number of key facts.

First, only a small portion of viewers watch content exclusively on Netflix. That means that a lot of people are consuming licensed content either in real time through their local television provider or on a slight delay via platforms like Hulu. By the time shows like Grey’s Anatomy, which was still the most popular Netflix program in Alaska, for example, come to Netflix, the season is over, it’s already run on Hulu, and it’s time for the next season. Of course it’s not in the top slot - because everyone has already seen it.

A second problem with a top slot-focused ranking system is that, even if the Netflix shows do own that spot (which makes sense, since they get a lot of hype and aren’t available elsewhere), this original content is still far outnumbered by licensed shows. As such, no single licensed program can compete with a Netflix show on the platform. That being said, in October 2018, Netflix originals accounted for just 37% of streams on the platform. The rest went to licensed content. It just didn’t go to a specific show.

Rethinking The Calculations

To better understand which shows actually dominate Netflix viewing, the platform and other systems need to rethink how they rank views and how originals fit into Netflix’s overall strategy. Obviously, these programs are popular - and vital to how the platform works today - and Netflix earns more on originals than they do on licensed properties. They also have the ability to expand and grow franchises in a way they can’t with licensed shows; Gund will be making plush toys based on the Netflix original Hilda, for example. In the same vein, products like Stranger Things t-shirts and Orange Is the New Black costumes also bring in added income. But value isn’t the same as popularity.

Popularity is best measured by looking at one of two options. Either Netflix should be measuring the viewing habits of exclusive Netflix users or they need to look at combined views across all platforms, including cable. In a survey of online-only viewers, for example, the most popular shows were all watching cable reruns; their favorite shows were The Walking Dead and Game of Thrones, though they were also watching older shows like Friends.

Netflix is clearly committed to its original content strategy, and it’s working well for them, but the platform should be cautious about how they describe that content’s popularity. Controlling the top spot on your own platform isn’t the same as making the most popular shows. This false equivalence could hold them back.

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The Author

<a href="/latest_stories/all/all/68" rel="author">Larry Alton</a>
Larry is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

 

 

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