NEW YORK: Netflix, the video streaming service, has built a reputation for creating award-winning original shows, such as House of Cards, but it has emerged that a full 80% of its viewing in the US actually comes from licensed TV and movie content.
First reported by Variety, the figure comes from research firm 7Park Data, which also found that 42% of Netflix subscribers mostly watch licensed content, such as TV reruns, with little regard for original shows.
What’s more, for those 42% of subscribers, licensed content accounts for 95% of their overall viewing, while just 18% of Netflix customers in the US are described as “originals dominant” whose viewing comprises 40% to 100% of originals.
And even though originals are important in terms of driving new subscriptions, the study suggests that 58% of new Netflix subscribers watched licensed programming first before moving on to original content.
Meanwhile, the ratio of licensed to original content viewing is even higher for Hulu, with 7Park Data calculating that 97% of Hula streams were from licensed content in the 12 months to the end of September 2017. Also, 89% of new Hulu subscribers watched licensed programming first.
Given the popularity of original Netflix shows and reports that the company is expected to spend up to $8bn on content this year, the 7Park Data analysis may come as a surprise for some industry observers.
With that in mind, Variety cautioned that the data was gathered without official numbers from Netflix and also that 7Park Data only took desktop viewing into account, so excluding views on mobile devices and connected TV platforms.
One further caveat is that the study does not reveal how many of 7Park Data’s two million global panel members are based in the US or what the margin for error is.
Nonetheless, Christopher Coby, senior industry analyst at 7Park Data, was clear, telling Variety that “licensed content is the engagement engine that drives SVOD viewership, retention and revenue”.
Sourced from Variety, 7Park Data; additional content by WARC staff