After years of focusing on producing original content, Netflix reversed course to prioritize third-party content licensing again. While Netflix expects content from major studios in what it calls “the natural state of the business,” the company silos its content solely for its 260 million subscribers, the largest global SVOD subscriber base.
Luckily, the industry’s most prominent content distributors have grown wary of hoarding content exclusively for their direct-to-consumer streaming services. These content distributors will gladly license films and shows to their rivals to increase revenue streams, especially to Netflix, which pays top dollar.
Netflix Subscribers Surge Despite Originals Slump
Netflix added 13.1 million global subscribers in the last quarter of 2023, reaching 206.3 million. However, after a failure to deliver any meaningful film releases, the head of its motion picture is “departing” after seven years. Outside of a handful of popular original shows, Netflix hasn’t delivered an original hit film in the last decade. Wisely, Netflix has signed massive deals with Disney and Warner Bros. Discovery to bring the two most prestigious film and television catalogs back into the fold.
However, with all but its most substantial films and shows appearing on Netflix, Disney and Warner Bros. Discovery run the risk of disincentivizing new subscribers joining or remaining on their respective streaming services.
Despite not delivering a substantial box office release, Netflix still received 18 Oscar nominations in January.
Netflix’s film strategy will revert to shorter theatrical release windows as merely a promotional tool and a contrivance to receive awards consideration. Netflix seems to be abandoning plans to release theatrical hits for good. Invariably, Netflix will further deteriorate the theatrical market by buying up festival and market hits, as it did at Sundance in a $17 million deal for the horror film “It’s What’s Inside.” Independent theatrical distributors will suffer as Netflix shifts away from original films, preferring to license and distribute completed projects.
Netflix added an impressive 5.1 million subscribers in Europe and the Middle East to reach 88.8 million, outpacing North America, which added 2.8 million, to reach 80.1 million. Uncover licensing rates for films and episodic content in North America and Europe.
Australia, Asia, and the Pacific added 2.9 million subscribers during the quarter to reach 45.3 million.
Growth in Latin America expanded by 2.4 million subs to reach 46 million. Discover what Netflix and others pay to license films in Latin America.
Netflix’s Licensing Surge: Reembracing Third-Party Films and Shows
After Netflix delivered impressive third-quarter results, its co-CEO announced on a conference call that the streamer plans to pursue third-party licensing more aggressively. This plan is a stark departure from Netflix’s hyper-focus on producing original programming that peaked in 2019 and 2020.
For several years, Netflix continued to publicize unsubstantiated claims that its original films and shows outperformed third-party content, contrary to all independent research.
Netflix’s recent refocus on third-party licensing, exemplified by the resurgence of middle-of-the-road shows like “Suits” and “Lucifer,” highlights a strategic pivot towards utilizing third-party content to bolster its catalog and retain subscribers.
Netflix’s reversal revitalizes forgotten gems and offers a lifeline to underperforming shows that went unnoticed on crowded networks. By turning these overlooked titles into streaming sensations, Netflix reinforces its position as a dominant player in the streaming landscape. This approach also addresses a critical aspect of content diversity, ensuring a wide range of storytelling that appeals to its global audience.
Despite the increased focus on licensing, Netflix will continue investing in original programming, but far less than in years past. For instance, in 2019, Netflix spent $15 billion on content, with 85% of new spending earmarked for originals, which was a high watermark.
However, during this period, series content from three of the largest providers comprised nearly 60% of Netflix’s library programming in terms of minutes viewed (Disney 19%, NBCUniversal 19%, and WarnerMedia 17%).
According to Nielsen’s research in 2019, eight of the top most viewed shows on Netflix were reruns of studio content that were soon after removed from the streamer to bolster the studio’s emerging direct-to-consumer platforms, including “The Office” and “Friends.”
Given Netflix’s insurmountable global subscriber base, competing content distributors are again lining up to license their shows and films to Netflix, where even moderately successful viewership numbers will surpass those of most rival streaming platforms.
Add real-world pricing context to this film and television market analysis.
FilmTake’s Global Rights Suite combines both the Film Licensing Index and Film Advance Index into one rights-pricing package for film and television executives evaluating licensing and streaming values, Pay-1 economics, minimum guarantees, presales, and international advance structures.
The Advertising Equation: A New Revenue Stream
Netflix’s introduction of an ad-supported tier marks a significant shift in its business model. This shift is aimed at broadening its subscriber base and diversifying revenue streams. It also reflects a pragmatic response to the evolving demands of content consumers and advertisers.
Netflix’s ad-supported tier has seen a nearly 70% increase in membership quarter-over-quarter, accounting for about 30% of all new sign-ups. This growth indicates a shift towards diversifying revenue streams and meeting various consumer preferences in a dynamic and complex market.
However, Netflix’s recent pledge for greater transparency in viewership data signals a move toward industry standardization for streaming platforms. This approach, echoing traditional TV ratings and box office metrics, aims to provide a clearer picture of content performance. By offering more detailed viewership insights, Netflix addresses the demands of creators, advertisers, and investors for more accurate and accessible data.
FilmTake Away: Underperforming Originals Lead Netflix Back to Being Hollywood’s Aggregator
With the most significant content distributors reversing their plans to make content exclusive on their in-house platforms and Netflix originals falling flat, Netflix will lead the way in third-party licensing and once again resume its role as Hollywood’s aggregator.
Streaming licensing is becoming more selective as platforms price films by window, territory, exclusivity, performance history, and platform utility. The market has not stopped buying films, but buyers now need clearer economic justification for each rights acquisition.
Cannes 2026 Market Tracker follows the packages, presales, acquisitions, buyer behavior, and rights-pricing signals shaping the independent film market. This tracker highlights how distributors are weighing prestige, commercial clarity, audience demand, and territorial value before committing to new films.
Netflix’s Cannes acquisitions reveal how streamer strategy has moved from broad international buying to selective rights deals built around awards potential, animation, stars, theatrical corridors, and global platform value.
Continue Reading Netflix’s Cannes Buying History Shows What Streamers Want
Cannes 2026 shows a more disciplined film rights market, where buyers still value prestige but increasingly demand audience clarity, commercial positioning, and downstream value.
Continue Reading Cannes 2026: Prestige Is Still Powerful, But Buyers Want Proof
The Global Rights Suite combines FilmTake’s Film Licensing Index and Film Advance Index into one integrated rights valuation package, pairing downstream SVOD, Pay-1, and multi-window licensing benchmarks with upfront minimum guarantee, advance, and acquisition pricing.
The Film Licensing Index provides structured pricing benchmarks for film licensing, covering SVOD, Pay-1, second-window, re-run, library, and DTV pricing frameworks across major markets, windows, territories, and performance tiers.