Optimizing Netflix’s Profit Strategy: Should They Sell Broadcast Streaming Rights?
Optimizing Netflix’s Profit Strategy: Should They Sell Broadcast Streaming Rights?
Netflix, one of the most successful streaming platforms today, faces the challenge of balancing content exclusivity with potential profit optimization. The question at hand is whether Netflix should licensed the broadcast streaming and continuation rights for their cancelled original series to other streaming services and TV/cable networks. This move could open up additional revenue streams, but it also carries risks. Let's explore the pros and cons and propose a strategic approach.
The Pros of Selling Broadcast Streaming Rights
Additional Revenue Streams: If a series isn't drawing enough viewers to justify continued production, Netflix could consider selling its rights to other platforms. This could bring in revenue that outweighs the original investment, thereby improving financial stability and reducing debt. As a bonus, Netflix can still claim credit for the original premiere.
Fanbase Engagement and Speculation: By openly stating their willingness to shop a show around, Netflix could generate enthusiasm among fans. Fans might encourage others to watch a cancelled series and rally behind potential continued lives on other platforms. This speculation can draw more viewers to the show, even if it's facing cancellation.
TV-Cut Syndication: Syndicating TV-cuts of past seasons to cable networks could fund continued production of new content without any out-of-pocket cost. The TV-cut would serve as a promotional tool, similar to how the TV-cuts of Sopranos and Spartacus brought more viewers to their respective platforms, leading to increased awareness and subscriptions.
The Risks of Selling Broadcast Streaming Rights
Dilution of Original Content Value: Licensing content to other platforms could dilute the prestige and value of Netflix's original content. Exclusive content is a key differentiator for Netflix, and allowing other platforms access might diminish the brand's unique selling proposition.
Business Risks: Content performance can vary across different platforms. What might thrive on Netflix may not do as well on another platform, potentially driving traffic and subscriptions away from their own content.
Debated Business Practices: Netflix’s business practices are already under scrutiny for not releasing numbers or allowing third-party verification. Selling broadcast rights could draw more criticism and questions about their rating systems and data collection methods.
A Strategic Approach
Netflix should consider a hybrid approach to optimize content monetization while maintaining its exclusive platform status. Here are a few strategic steps:
Content Audit: Regularly review series and identify those that are not performing as expected. Consider selling or syndicating rights to those that are underperforming. Investment in Promotional Content: Promote content that is licensed to other platforms as a way to drive traffic back to Netflix. This can be seen as a promotional tool rather than a revenue loss. Exclusive Premium Content: Focus on producing high-quality, exclusive content that continues to differentiate Netflix. The prestige of original content remains a significant competitive advantage.Conclusion
While selling broadcast streaming and continuation rights may seem like a quick path to profit for cancelled original series, it comes with significant risks. By adopting a strategic and balanced approach, Netflix can optimize its content monetization without compromising on its core strengths.