Netflix finds that purchased movies which have had a broad theatrical release provide the most value for money, generating more viewings per dollar invested compared to original films or acquired TV series, as indicated in a recent study.
The recently published report titled “Analyzing the Evolving Movie Strategy of Netflix,” by Ampere Analysis on Wednesday, provides insights into the viewing patterns for feature films (both original and licensed) on Netflix over a period. The author, Christen Tamisin, noted that movies acquired under Netflix’s premium pay deals with Sony and NBCUniversal account for a substantial portion of the total viewing on Netflix, and due to their lower cost-per-view, they are more economical compared to Netflix’s high-budget original productions.
Last year’s first half saw Netflix investing approximately $1.07 billion on movie licenses, resulting in a total of 9.23 billion views. Meanwhile, the company spent slightly less than half that amount, around $0.51 billion, on original movies which attracted just under half the total viewers, approximately 3.98 billion. It’s worth noting that while original and acquired TV series generate far more views for Netflix, they are less cost-effective compared to movies on a per-view basis. Ampere Analysis found that the average spend per view was $0.55 for licensed TV shows and $0.68 for original series, whereas it was just $0.12 for licensed movies and $0.13 for original films.
On Netflix, original movies continue to be the most sought-after titles, with the fantasy film “Damsel” starring Millie Bobby Brown leading the pack in terms of views during the first half of the year, racking up an impressive 144 million views. Close behind was F. Gary Gray’s comedy heist film “Lift,” featuring Kevin Hart, which garnered 129 million views. The top acquired film was “The Super Mario Bros. Movie” from Universal, which managed 80 million views and ranked 18th overall. Other notable performances include the Universal animated hit “Minions” with 73 million views, and Sony’s “The Equalizer 3” with 54 million views. However, it’s important to note that access plays a role in this ranking. Netflix original films are available to all users globally at the same time, while acquired films may be limited to specific territories and released over a longer period due to various licensing agreements.
It’s intriguing to note that the study revealed original films tend to lose their audience faster than acquired titles. For instance, if we look at successful films that garnered at least 12 million views when they debuted on the platform between H1 2023 and H1 2024, Ampere’s findings showed that originals started with a higher viewership average of 30 million views, but their popularity dwindled more rapidly, averaging only 9 million views after a year. On the other hand, acquired hits initially attracted an average of 20 million views and maintained a stronger following, averaging 12 million views even a year later, which implies that acquired movies may retain their appeal over the long term.
Among movies acquired, those licensed from prominent U.S. studios tend to remain popular for the longest time. Titles from studio libraries, which are films initially released before 2020, exhibit the most enduring appeal. The study revealed that the average drop in viewership for a movie from a major studio library was only 29% over a one-year span, compared to 49% for newer studio movies and 57% for non-major library films.
It seems that Netflix is moving towards purchasing more movies as part of its movie strategy. In 2023, they only commissioned 105 original films, which is a decrease of 45% compared to their record high of 190 commissioned titles in 2021. The report found that last year, purchased titles made up 84% of Netflix’s global film library, an increase from 80% in 2023. Additionally, the majority of films on Netflix have been acquired. In contrast, five years ago, licensed titles accounted for 91% of their feature film collection.
Moving forward, Netflix intends to carry on incorporating significant studio films into its collection. Last October, they expanded their deal with NBCUniversal for animated features and acquired U.S. rights to live-action titles from both Universal Pictures and Focus Features. This agreement means that live-action films will appear on Netflix no later than eight months after their cinema debut, bypassing the PVOD window and streaming exclusively on Peacock for four months first.
As a gamer, I’ve got to say that Netflix’s approach towards theatrical releases hasn’t shifted one bit. CEO Ted Sarandos made it clear that our main goal is to provide exclusive first-run movies to our members right here on Netflix. He mentioned that exceptions, like the two-week Imax release next year for Greta Gerwig’s Narnia adaptation, will still be rare occurrences. In other words, Netflix and cinema are mostly online-only territories.
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2025-03-19 15:24