For many years, entertainment companies were happily licensing classic movies and television shows to Netflix. Both Netflix and entertainment companies were benefitting from the arrangement, as the streaming service received popular content like “Friends” and Disney’s “Moana,” while companies received a substantial amount of money. But around five years ago, executives began to realize they were providing valuable content to a strong competitor rather than building their own streaming services, leading to the slowing down of content licensing.
However, the harsh realities of streaming – such as significant debt burdens and streaming services that don’t make much money – have led companies like Disney and Warner Bros. Discovery to loosen their restrictions on licensing content to Netflix to generate much-needed revenue. Companies like Disney will begin sending a number of shows from its catalog to Netflix, including popular titles like “This Is Us” and “Prison Break.” These companies are making a financial necessity to compete in the streaming industry and are looking to their existing content to help create new revenue streams.
Despite the increase in licensed content on its service, Netflix does not see a need to reciprocate by licensing its original series to other companies. The streaming giant has thus far benefitted from licensing content from other studios to populate its service with established favorites to compliment its original programming. This arrangement has enabled Netflix to offer well-known titles to its subscribers, allowing the service to maintain popularity and increase viewership.
