Jul. 7 at 7:31 PM
For every major SVOD service except
$NFLX roughly 90% to 95% of US viewing hours go to catalog fare. This is comprised almost entirely of licensed & older content. Audiences continuously return to or discover long-running former linear hits like Friends, Gilmore Girls, & Suits as "comfort TV"
On the surface, you might think competing streamers have better margins & less risk by relying on proven content w/ fixed licensing costs...but...Netflix actually commands the far superior financial model & profit margins despite its massive original content spend
Competitors must allocate massive capital just to retain or license old catalog shows, they have fewer resources to develop fresh hits. This leaves Netflix with very little meaningful competition when it comes to consistently launching major, new cultural moments
Keeping nostalgic catalog shows exclusive means rivals forfeit guaranteed, highly profitable syndication cash from external licensing, hoping monthly subs will bridge the gap.
Netflix's 40% original content viewing share creates a self-sustaining engine. Originals drive global subs acquisition & retention without ongoing external licensing fees or reliance on competitor-owned IP
While rivals spend heavily on both original production & defensive catalog retention, Netflix successfully monetizes its original hits across a massive, established global base
$PSKY $DIS $CMCSA $WBD