Netflix is a streaming giant that has slowly and steadily taken over the world. With the vast variety of content and a highly appreciated user-interface, the OTT application has easily become the favourite for many users. However, with the significant benefits, the application also comes with its own set of flaws, and one of the major long-standing ones it has been facing is losing licensed content left, right and centre.
Netflix provides licensed content from all around the world in the form of TV shows and movies. Some of these titles are highly rated and get loads of views, but Netflix still has to let go of them due the terms of the licensing agreement. Although, Netflix does makes some moves in order to preserve these titles, but factors such as, ‘if the rights of the title are still available’, ‘how much does it cost to renew the license’ and ‘how popular is the title in that specific region’, come into play.
According to the latest report by Variety, Netflix has recently lost some big name titles such as Criminal Minds, The Office and Friends. These titles were major bread winners on the streaming platform and had accumulated billions of minutes in terms of watch time. However, Netflix started creating their original content in order to counter the loss of such shows. Netflix at the moment has more that 2000 original titles under its belt and will keep adding more.
This strategy, although promising, has not been working in the way as Netflix would like. Most of the licensed shows procure significantly more watch time when compared to Netflix Original titles. Although, Netflix still has a plethora of licensed content under its belt, losing out on them too could become an alarming concern for the OTT giant. Netflix already has a plan of action in order to counteract this issue, but we still need to see it in action.
Netflix has decided to add a new tier to the subscription system that will allow the users to include advertisements in their service on a lower cost basis. These ads will help Netflix gather funds that will help them keep up with the licensing costs. People are yet to see this move in action and whether it will help things or make them worse. These are trying times for the streaming application and they need to think of a strategy fast to retain their existing subscribers and also bring on new ones.