Netflix, Inc., the world’s leading online streaming service provider which is available in over 50 countries, which prefers original content licensing. According to news, it is completely focusing its attention towards shifting to original content.
In the fall of 2013, Netflix struck a deal with Walt Disney’s Company, ABC Studio regarding original content. After which ABC Studio is currently working on live action series for Netflix, which will have characters from Marvel Universe. The first series was Daredevil that proved to be quite a hit amongst the audience. Presently, they are working on the other three live action series which will also include other Marvel Universe characters.
At the end of the 2nd quarter of 2015, the company had a customer base of 65 million members out of which 42 million are U.S based. In the second quarter of 2015, there was a gain of 0.9 million members which was, as stated by Netflix, due to their strong original content display. The original content shared by Netflix has increasingly become popular amongst the members and viewers. This viewer behavior could lead to an increase in viewing hours and also lead to a rise in potential subscriptions.
A potential threat to Netflix is Amazon Prime as it is offering its users to watch movies and videos for free on a $99 per year subscription. Amazon is also in a race to acquire 12 original content movies on yearly bases to compete with Netflix. On July, 16 2015 Amazon struck a deal with HBO to allow HBO’s original content to be available on Amazon’s Fire Devices for their viewers.
Having original content produced exclusively in the name of the company will help Netflix with global distribution rights. Exclusive original content in the long run can add to its revenue. Netflix has stated that its going to focus on internet based devices since these devices are customer’s first preference. People tend to watch movies and shows via internet on their desktops, laptops or even smartphones nowadays, some don’t even bother to buy dish or cable on their television sets anymore.
ComScore provided a report which said that 40% people prefer to use internet connected TV devices to watch Netflix. The reason for this is that consumers prefer internet connected devices to get rid of the cord-cutting phenomenon. They prefer to watch it online rather than on television sets, and Netflix has an edge over all others due to its low streaming cost, ad-free online streaming and also its original content.