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Netflix and Amazon are spending billions on originals, but people prefer the old stuff

Obsession
Glass
Obsession
Glass

If your go-to streaming pick is old reruns of TV shows like Seinfeld, Friends, and The Office, you’re in good company. Netflix and Amazon Prime keep boasting about their originals, but people still watch more of the old stuff.

Only 20% of the time spent watching subscription-video-on-demand (SVOD) services—including Netflix, Amazon Prime, and Hulu—is spent on originals, viewer-measurement firm Nielsen revealed. The other 80% is spent watching the back catalog of content acquired from other TV and movie studios, like series re-runs and movies that have left theaters.

“What’s driving subscriptions and renewals may be the originals, but our research shows most of the viewing time is spent with catalog programming,” Steve Hasker, Nielsen chief operating officer, told MediaVillage, where he shared the data.

Hasker makes two interesting points here, and the first one is important. It explains why, even if users are spending more time with old programming, streaming services are betting billions on originals.

Netflix is working toward a library that’s half originals, half licensed shows and movies—making more original stuff available for viewers to watch. It’s spending $7-8 billion, up from $6 billion this year, to do so. It even plans to release more original movies next year than most major movie studios combined. Meanwhile, Amazon Prime and Hulu spent an estimated $4.5 billion and $2.5 billion on content in 2017, respectively—and those budgets are expected to increase next year. They’re not the only tech companies in the original content game either. Facebook and Apple have each begun producing their own shows.

The approach seems to be paying off. At Netflix, investors only care about subscriber growth. And originals get new audiences in the door and keep them there. Netflix has said in quarterly notes to investors that excitement around new releases like Stranger Things and Narcos drove subscriber tailwinds. And its stock price, in turn, has a direct correlation to demand for its original shows.

Sign-ups for Hulu also lifted in this year after the platform released The Handmaid’s Tale in April—a dystopian drama that later won Best Drama Series at the primetime Emmy Awards. As of September, the streaming service had a 98% rise in daily sign-ups from March, the Hollywood Reporter reported. Amazon doesn’t share subscribers numbers but has been equally bullish on original programming, and is best known for shows like Transparent, Man in the High Castle, and The Grand Tour.

But it’s not all viewers want to watch. This data clearly shows that audiences are also drawn to familiar content and programming from other networks and studios that they might have missed. It’s the wide breadth of series and movies that has made many of these streaming services so popular—and they’d do best not to forget that.

Nielsen, which has been tracking TV for decades, began measuring streaming content in 2014 and recently announced a new service to sell that data to studios like Disney-ABC, Lionsgate, and NBCUniversal.


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