Originals for the win. Netflix proves there’s life after Friends and The Office
Last month, Netflix introduced daily top 10 lists, showcasing the most popular movies and TV shows on the service.
The lists are updated every day at 11:30 am PT and reflect the titles with the highest number of accounts that watched at least two minutes the previous 24 hours.
When it was announced that Netflix was losing Friends and The Office, people absolutely lost their minds. We said goodbye to Friends at the end of 2019 and we’ll see them again, along with, in my opinion, a much-overhyped reunion special on WarnerMedia’s HBO Max in May. The Office will leave Netflix at the end of this year.
Some predicted that Netflix was doomed, citing third-party data revealing that Friends and The Office were two of the three most-streamed shows on Netflix.
But data is absolutely meaningless without context. And my friend and colleague, Alan Wolk, explained it best.
“People don’t subscribe to Netflix to watch ‘Friends’ and ‘The Office’. They subscribe to watch Stranger Things and Orange Is The New Black and Black Mirror and (if they’re smart) Bojack Horseman. Then, when they’re done watching all the originals they are interested in that month or that week, they’ll turn on Friends, because people really love comfort food TV, familiar shows where they already know the characters and the plots and what happens at the end, shows that only take up 20 minutes of their time.”
Losing the shows was no doubt a bummer for Netflix, but customers would and will inevitably shift to watching other content. And for what it’s worth, Seinfeld, which is currently on Hulu, will make its way to Netflix next year.
Netflix is holding its own against Disney+ with customers that subscribe to both subscription services. Based on data from Reelgood, Netflix is being used about three times more than Disney+ since November 12, 2019 (the date Disney+ launched in the U.S.).
And what we’re learning from Netflix’s top 10 lists is that the majority of shows have been Netflix originals.
Here are the top 10 TV shows and movies from Friday, March 13.
On My Block (Netflix Original)
Love Is Blind (Netflix Original)
The Trails of Gabriel Fernandez (Netflix Original)
Dirty Money (Netflix Original)
Paradise PD (Netflix Original)
Altered Carbon (Netflix Original)
Toy Boy (Netflix Original)
Castlevania (Netflix Original)
Locke & Key (Netflix Original)
Spenser Confidential (Netflix Original)
The Angry Birds 2 Movie
Life As We Know It
Kung Fu Panda
Pokemon: Mewtwo Strikes Back (Netflix Original)
He’s Just Not That Into You
With the exception of The Office, every other show is a Netflix original. The movies list, on the other hand, is mostly licensed content. These films are all brand new to Netflix, which can explain their popularity.
Netflix knew the day would come when rights-holders would begin reclaiming their content, which is why the company dove headfirst into originals back in 2012, with House of Cards, produced by Media Rights Capital.
Original programming allows Netflix to create programming at a fixed-cost, which translates into a lower cost per subscriber than the content it licenses from third-parties.
And because of its massive jumpstart into streaming and subsequent large subscriber base, Netflix was able to develop content at a much cheaper clip than its competitors.
To put this into perspective, Netflix paid around $100 million for House of Cards over twenty-six episodes (or $4 million per episode). At the time, the company had 30 million customers, which means the cost per subscriber to produce the series was about $3.33.
( $100,000,000 / 30,000,000 = $3.33 per subscriber )
For a competitor to create the same show, with let’s say 1 million subscribers, they would need to pony up $100 per subscriber.
( $100,000,000 / 1,000,000 = $100 per subscriber )
Not only has Netflix changed the way we watch television, but with its originals strategy, the company changed the industry’s economics, which has given them a significant advantage and 167 million global subscribers.
Life after Friends and The Office is proving to be just fine. And even though originals will fuel Netflix’s business going forward, licensed programming will be essential to its overall catalog.
Not that there’s anything wrong with that.