Netflix is preparing for a future where its content is mostly its own

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Image: Erica Parise/Netflix
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Netflix claims it wasn’t caught off guard last summer when Disney said it would soon stop sending new movies like The Incredibles 2 and Avengers: Infinity War to the streaming-video platform. It says it had been preparing for that eventuality since 2013, when it released House of Cards, its first self-commissioned original.

The series was a hedge against a future in which the TV and movie studios would want to keep all their best content for themselves. Disney, which plans to acquire another prominent maker of TV shows and films, Fox, is holding onto its content ahead of the launch its own streaming-video service. Other networks like HBO, CBS, Showtime, and Starz also have their own subscription services.

“The way we look at this long term is that our competitors will want that content on their own services,” said Ted Sarandos, chief content officer at Netflix, in an earnings interview on Monday. “That was a bet we’ve made a long time ago when we got into original programming.”

By the end of 2018, Netflix will have spent close to $20 billion over the least three years building up its video library, including more original series, movies, and specials that are exclusive to the service. Netflix said in 2016 that it was working toward a catalog evenly split between branded Netflix originals and licensed programming. When asked for an update earlier this year, chief financial officer David Wells said Netflix was open to even more.

“We don’t have a particular target in mind. We’re about having the best content,” Wells said at a Morgan Stanley conference in February. “I could never see that getting 100%. Could it get over 50%? It could.”

Not every studio will go the way of Disney. Viacom’s MTV recently launched a studio that plans to remake ’80s and ’90s classics like Daria and The Real World for streaming video platforms, though it does not currently have a deal with Netflix.

Netflix still licenses movies and TV shows from other studios and partners with them on productions. Disney’s ABC Studios co-produces series exclusively on Netflix, such as Marvel’s Luke Cage and Daredevil. Fox 21 TV Studios is producing the upcoming Ryan Murphy drama Nurse Ratchet for the platform. And Netflix distributes series Black Lightning and End of the F*ing World from the CW and Channel 4, respectively, exclusively outside of the regions those networks operate in.

But Netflix is also producing more programming itself, such as Stranger Things and 3%, so it’s less reliant on other networks. It recently went from original TV dramas, comedies, documentaries, and arthouse films to reality series, talk shows, and lifestyle programs.

“We thought a long time ago that the unscripted networks are also going to want to keep their own content for their own services,” said Sarandos. “We started investing our own unscripted programming and have had some really great out-of-the-box hits with Nailed It and Fastest Cars and Queer Eye.”

It’s also stocking up on international programming, like the Indian series Sacred Games, as well as big event films—the kind you’d expect to see in theaters— with directors like Martin Scorsese. Sarandos said we’ll see more of those movies in a year or so, as they take more time to produce.