Netflix Is Already Feeling the Painful Effects of the Streaming Battle that is Being Staged

With competition arriving and more entering the market the streaming giant is poised to lose content.

The news is not at all surprising, but the scope and numbers are enough to gain attention. Netflix has enjoyed a long run as the titan in the streaming marketplace, but numerous major media players have been releasing, or announcing, their own services. This has means Netflix is facing two primary challenges: competition for audiences, and the loss of content.

It has been expected that these impending services would be pulling movies and shows from the media giant, and some examples have been taking place for some time. For example, despite being Netflix properties, all of the original Marvel TV shows have been taken off of the library. Disney has no immediate plans to bring those over to its streaming service, which debuts this fall, but the studio has said they will become part of its content in the future. Now two very big properties for Netflix are in the balance.

The announcement was made that the television show “Friends” will end its run on Netflix at the end of 2019. This is because the new streaming service from Warners Media (now owned by AT&T) called HBO Max will be taking the rights to that show. This is a blow for Netflix, as “Friends” stands as the second-most watched program on its platform. But this is only the start of the troubles for the market leader.

Netflix recently announced that it is also losing the top-ranked show in viewership, “The Office”. The rights for that program will be going to the new NBC/Universal streaming service set to arrive soon. All of the players have been readying for such an occurrence. The corporations who are setting up their own services have only been willing to license their programming to Netflix in short term deals in recent years.

These have usually been 1-year agreements, with the expectation of taking over those rights once their services have begun. Warners, the production company behind “Friends” has been waiting for the contract expiration, knowing it will be an audience draw for its new platform. Meanwhile Netflix has paid dearly just to retain those short term deals. The “Friends” contract was estimated to have cost the provider $100 million annually. The deal for “The Office” was just as lucrative.

It was money deemed to be well spent by Netflix, as the outlet has logged viewing minutes in the tens of billions on those two programs in 2018. “The Office” alone accounted for 3% of all of Netflix viewing traffic. But it is not only the top two shows that are at risk of flight. Of the 20 most viewed programs on Netflix, the streaming provider only retains the rights to a handful of those titles. Just considering Disney, this will be a major blow to the Netflix vaults because not only will it involve the classics, Marvel, and Star Wars properties but also all of the 20th Century Fox catalog, which it recently acquired.

Once the major studios all ramp up their services the content will be cast wide in the streaming marketplace. Between the movies they own, and the TV productions as well, the competitors will be forcing Netflix to res\semble something completely different in the next few years.

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