Why Can We Expect More and More Original Productions on Netflix

It has something for everyone: there are 70 new attractions promised in 2016 only

A rental service for DVDs by mail in the United States to a streaming giant with global reach. That’s how it gives to summarize the trajectory of Netflix. With so much prosperity, the company has been able to bet increasingly on original productions, especially series. This is a big difference, no? More than that: in the background, this is a survival strategy.

Not that Netflix is going through some sort of crisis. It is the opposite: the company started in 2016 offering its services in over 130 countries. We are talking about the implementation of the company’s largest expansion plan since its inception in 1997. Instead of survival, we could say that this is a strategy of “world domination”, so.

Too Successful, under Renovation

The problem is the side effects. The growing success of Netflix is making the company face difficulties in closing licensing agreements. The consequences you know well: movies or series that will add the catalog and do not come back (I today miss Futuramaand South Park ), beyond a certain lethargy in the renewal of the content – the collection has fewer titles than you would like, hit ?

This is an old complaint. When Netflix came to Brazil in 2011, many people experienced the service, but was disappointed with the amount of offered productions. Since then the collection has increased considerably, but the feeling that the content could be more extensive remains, albeit on a smaller scale.

Whoever thinks that this is just a problem of the Brazilian version. Netflix does not like to openly release their numbers, but a survey by AllFlicks, site that lists the content available on the service, indicates that the company’s assets in the United States has lost about 2,500 films in the last two years: early 2014 the catalog had 6,494 titles; today there are 4,335.

It is a reduction of approximately 30%. And look who lacked talk series and TV shows: the beginning of 2014 there were 1,609 productions of the kind; Today the collection records 1197 series.

The figures depict the version of Netflix to the United States, but the situation of the service in other countries is not much different. This is basically because each available production has a term to stay in the licensing established catalog. As Netflix can not always renew the agreement, these bonds disappear.

Netflix also faces difficulties to bring unpublished titles to the platform, especially those who have just come out of the cinema. There are several reasons for this. Licensing agreements or renewal may have higher prices than reasonable, for example. It is also possible that rival services establish exclusivity agreements with certain productions.

Levelling down

For the company, the ideal would be to offer a universal collection, that is, only for all countries. So it would be easier (and perhaps less costly) to negotiate licensing and users do not bother to use proxies or other ruses to access content available in a foreign collection.

But the agreements are almost always local. “The distributors have different interests in each country,” said Carlos Gomez Uribe, vice president of innovation Netflix, the Estadão. That’s why there are differences in each market catalogs.

At this point, it is not necessarily bad for Netflix decrease the catalog of the American version, oddly enough. This is a way to level down: the US collection, the most generous in number of titles, just getting closer to the amount of productions offered in other countries, leaving the unified platform, so to speak.

But neither I nor you would be happy to know that Netflix is deliberately reducing the acquis. This is the kind of economy that would lead users to competing services (in the market where they exist) or, worse, make everyone use the torrents of life. What the company is doing, so it’s an exchange: the third-party content decreases (but does not end, mind you), but the original production increase.

There are a lot of cunning in this approach. Users have understood that, in most cases, the original attractions Netlix have excellent quality and are unique: Narcos, Sense 8 ,Fuller House , Orange Is The New Black , Daredevil,  Jessicas Jones , Flaked, House of Cardsand many others productions are available only there. Or almost: House of Cards , for example, is produced by Media Rights Capital, which has some autonomy to license the series for other companies.

The best part is that the original productions actually decrease the dependence on Netflix distributors, movie studios and TV producers. The original content can stay indefinitely in the collection and, moreover, have simultaneous launch in all markets where Netflix operates.

70 New Unique Attractions Only in 2016

It is not surprising, therefore, that Netflix plan to produce about 70 attractions only in 2016. The case for this is not small: at least $ 5 billion are available for these productions and licensing agreements.

With so much money, Netflix is able to diversify: the 70 new attractions, at least 20 will be productions for children, public finding more and more space in the service. The effects of this are already being felt by rivals. In 2015, Disney Channel and Cartoon Network had a 25% drop in revenue, approximately. In part, the “fault” is that the streaming services.

Another proof of the engagement of Netflix with original productions is in the details.Daredevil and Jessica Jones , for example, were made so that even users who do not follow the Marvel publications could understand the stories. This approach was so successful that the complaints about these series are uncommon.

It may not be obvious, but the diversification of content is also a care to increase engagement. Reed Hastings, CEO of Netflix, said last year that think Daredevil very violent, but admits to being a fan of Unbreakable Kimmy Schmidt. What he meant by this is the following: we can expect more and more productions for all tastes.

If before there was a certain distrust of investors in relation to this strategy, now it seems clear that the best way for Netflix is that. So much so that the number of regional original production should also increase. The company is already investing in Spanish content, just to illustrate. The same should happen in relation to Brazil.