In an interview with Bloomberg News over the weekend, Netflix’s Ted Sarandos and Greg Peters said Netflix is better positioned to capitalize on its originally-produced television shows and movies compared to other companies.
“We’ve never had that as part of our business model,” Sarandos affirmed when asked by Bloomberg if the streamer would license content to competitors. “We do a better job of monetizing our content through our subscription model, and those other businesses, particularly the linear TV businesses, are in massive secular decline.”
Sarandos said he was “not going to try to maximize revenue” from linear television, which he called a “shrinking business,” though some free, ad-supported streaming services that re-package shows and movies into linear streams have seen tremendous growth in customers and advertising revenue over the last few years.
Netflix’s decision to not license out original content reverses a position once considered by former co-CEO Reed Hastings: In early 2021, a report indicated Hastings was open to the idea of licensing out original shows and movies to traditional cable and broadcast networks, and had taken meetings with Comcast’s NBC Universal and Paramount Global to that effect.
Some content originally exclusive to Netflix has been licensed to third-party streaming services, including the hit crime drama “Narcos,” which was made available through linear channels on Paramount Global’s Pluto TV. The deal was reached with Gaumont International Television, the production company behind Narcos, after Netflix’s exclusivity window expired.
Content that Netflix has actually produced on its own or in partnership with another company — programs like “Stranger Things,” “The Crown” and “Outer Banks” — will remain exclusive to the streaming service for the foreseeable future.
Instead, to grow revenue, Netflix has looked at some other options, including launching an ad-supported version that lowers the cost of a Netflix subscription to around $8 a month, making it more-affordable for households who want a cheap way to watch the streamer’s movies and TV shows and are willing to tolerate a few ad interruptions every hour.
Netflix is also exploring ways to crack down on freeloaders who obtain usernames and passwords from actual subscribers: Last year, the company began charging for the privilege of password sharing beyond a customer’s immediate household, a plan that will likely see a broader rollout in the next year or two.