Insights / News and Opinion / Rise in licensed content on US streaming platforms
News and Opinion / 25th September 2024
By the end of FY 2022, Netflix Originals had become a standard bearer for innovative global storytelling among all streaming platforms. With a laser focus on growth, Netflix had the production budget to match its ambition. This was the time of “Peak TV”, when original content seemed critical to future success of SVOD.
That model has shifted, according to viewing data observed by Digital i. Over the last two years, an increasing number of consumers, particularly in the U.S., have turned away from original content toward licensed programming. The change is substantial; original content viewership dropped from a high of 56% in Q4’22 to 40% in Q2’24.
And it’s not just at Netflix—this trend tracks across streaming services. Netflix had a higher share of Originals viewers than the competitors included in our analysis (Prime Video, Disney+ and Max).
Though Netflix Originals are consistently more heavily promoted than licensed content, viewership of the older, archived programming continues to rise.
A case study comparison of Grey’s Anatomy and Stranger Things illustrates this change. From Q1’21 to Q1’24, Grey’s Anatomy ranked 10th overall in percentage of Netflix subscribers reached in the U.S. In fact, due to the number of show seasons and broad range of audience, Grey’s Anatomy generated the most viewer hours out of all shows on Netflix over that period of time. The Wall Street Journal included our data in their recent article about the success of Grey’s Anatomy.
Indeed, the show’s U.S. reach is so broad, it generated almost double the viewing time of Stranger Things. In 2024, when consumers choose between Grey Sloan Memorial and the Upside Down, the comfortable drama of a certain Seattle hospital wins hands down.
After the peak of SVOD original content in FY22, licensed programming showed increasing gains in viewership. The last straw was the writer’s strike in Q3’23, which ended the reign of original programming. Series production stopped overnight, and streaming platforms were forced to rely on licensed content to pick up the slack. Digital i data showed viewers have consistently turned to licensed programming for an ever-increasing share of their time, shifting from 44% to 60% of total viewership.
It’s not simply consumer taste or content availability behind the change. As the pressure for profitability rises among streaming services, media executives at platforms like Netflix are increasingly relying on licensed content to drive revenue. Who needs a big production budget when the drama of Grey Sloan Memorial meets consumer demand? Whether or not this shift can hold consumer attention forever remains to be seen.
For more information about content trends on streaming platforms in the U.S., check out our inaugural Trend Report and companion webinar, available to download here.
Digital i data changes how our clients assess the intersection of consumer insights and business, enabling them to adjust and evaluate their own revenue increasing strategies. Let us help you create profitable streaming operations by delivering the data, context, and analysis you need for success.
JOIN THE REVOLUTION
DIGITAL-I.COM
Speak to an expert to find out how our intelligence platform will revolutionise your TV reporting & SVOD research
