Over the years, Netflix has lost or canceled many of its most popular shows, from “How I Met Your Mother” to “Orange is the New Black.” Even though the removal of these shows did not result in an overall loss in subscribers for Netflix, the recently announced cancellations of popular classics “Friends” and “The Office,” which are set to retire from the platform in 2020, will hurt the platform’s prospects.
According to Tom’s Guide, a technology review company, while Netflix has long claimed the title of most popular streaming service, companies such as Disney, Apple, NBC and AT&T have also started releasing their own competing streaming platforms. NBC’s NBCUniversal and Disney’s WarnerMedia have consequently decided to claim “The Office” and “Friends” for their respective platforms.
This is a huge hit to Netflix, according to Tara Law from TIME Magazine.
“While Netflix has long been the best-known streaming service, other companies are encroaching on the company’s territory,” Law wrote. “Older content which Netflix acquired from other companies is rated more highly than original Netflix content.”
Law backs this claim with statistics from industry analyst firm Ampere Analysis: compared to new Netflix Original shows, which receive an average viewer rating of 77, older classics like “Friends” receive a higher average rating of 82.
Knowing this, Netflix has forked over $100 million to WarnerMedia in an effort to keep “Friends” on its platform for the rest of 2019, according to The New York Times.
To increase their appeal to viewers and give themselves a competitive edge in the streaming industry before these shows inevitably leave, the company has expanded on its Netflix Original content, introducing new movies like “The Perfect Date” and the third season of Original series “13 Reasons Why.”
However, these efforts have largely proved ineffective. Even though the company has spent $13 billion — about 85 percent of their new spending — on producing Originals, according to David Trainer from Forbes the company has reported its lowest yearly subscriber growth numbers in three years, and its first domestic subscriber loss since 2011.
Trainer reports that Netflix’s revenue growth from subscribers is now even slower than expenditure growth and that licensed content like “Friends” and “The Office” garner a majority of subscriber views.
Netflix’s future is in danger if they don’t draw more subscribers after the loss of this content. For now, it might be best to enjoy Netflix while its major licensed content is still here, because in another few years, Netflix itself might be facing termination.