No ‘Friends,’ ‘The Office’ means Netflix can spend more on own shows

Yes, Netflix is shedding “The Office” and “Friends” within the subsequent two years. But that will not be a foul factor for the streaming firm.

On Wednesday, Netflix launched its second quarter earnings report, noting that shedding these expensive packages will liberate the corporate’s price range and permit it to spend more on its own authentic content material.

“Much of our domestic, and eventually global, Disney catalog, as well as ‘Friends,’ ‘The Office,’ and some other licensed content will wind down over the coming years, freeing up budget for more original content, ” the corporate wrote in an announcement Wednesday.

As Netflix’s opponents gear as much as launch their own streaming companies, Netflix may really feel the strain. The lack of content material and rising competitors are main components in Netflix’s determination to bolster its lineup of shows that can’t be seen on some other platform.

The firm paid $100 million to stream “Friends” and was prepared to pay as much as $90 million to carry onto the rights for “The Office.” Not to say, it was spending about $150 million for content material from Disney.

“We don’t have material viewing concentration as even our largest titles (that are watched by millions of members) account for only a low single digit percentage of streaming hours,” the corporate mentioned. “From what we’ve seen in the past when we drop strong catalog content (Starz and Epix with Sony, Disney, and Paramount films, or 2nd run series from Fox, for example) our members shift over to enjoying our other great content. “

“The Office” has been a staple on Netflix, and was far and away essentially the most streamed present on the service in 2018, in keeping with knowledge from Nielsen. Viewers streamed more than 52 million minutes of the present that 12 months – 20 million more than the second-most watched present, “Friends.”

According to Streaming Observer, Netflix customers watch about 164 million hours of content material on the streaming service every day, or about 5 billion every month. To put that into context, that is about 60 billion hours of content material in a 12 months.

So, although “The Office” was essentially the most watched present, it accounted for much lower than a p.c of the full hours prospects spent watching Netflix in 2018.

Netflix has been prolific in including new authentic content material to its streaming service, it far and away exceeds what its opponents launch annually. In 2019, Netflix was rewarded with 117 Emmy Award nominations for its authentic content material together with “When They See Us,” “Nailed It,” “Dead to Me” and “Russian Doll.”

Netflix has been burning by money during the last decade so as to add more. Guillermo del Toro ( “Shape of Water”), Ryan Murphy (“Glee”) and Shonda Rhimes (“Grey’s Anatomy”), amongst others, have been employed to create distinctive content material solely out there on the streaming service. In some circumstances, these contracts span a number of years and are mentioned to be price a whole lot of hundreds of thousands of {dollars}.

 Last 12 months, Netflix shelled out more than $12 billion to buy, license and produce content material. This 12 months, that determine…