Netflix is reportedly considering licensing some of its original content to other TV distributors in a move that would make the service into a content arms dealer.
The streaming service built its massive subscriber base through exclusive original content like “Stranger Things” and “The Queen’s Gambit” and by licensing content like “The Office” from legacy media companies. However, according to The Information, Netflix is looking into a strategy reversal of sorts that would see the company license its movies and shows to companies like ViacomCBS and NBCUniversal.
Netflix reportedly held conversations with ViacomCBS about licensing the film “Bird Box” for the CBS Network and with NBCUniversal about licensing the film “The Christmas Chronicles” for Peacock. The report suggests that Netflix is looking to monetize older films since they no longer help much with attracting and retaining new subscribers.
After a huge 2020 for subscriber growth, Netflix is still far and away the largest subscription streaming service in the U.S. The company officially crossed the 200 million global subscriber threshold after adding another 8.5 million paid members in the fourth quarter.
For the full year, Netflix said it added a record 37 million paid memberships, reached $25 billion in annual revenue – up 24% year over year – and grew operating profit 76% to $4.6 billion.
“Since the start of 2018, our paid memberships have risen from 111 [million] to 204 [million] and our average revenue per membership has grown from $9.88 to $11.02, despite significant F/X headwinds. This approach has allowed us to organically increase revenue by $4-$5 billion annually over the past several years,” Netflix wrote in a letter to shareholders.
Netflix said that it is now able to generate enough more than enough cash to fund its continued growth without borrowing money. However, a move to license some of its older content could help the company to continue growing revenue in markets like the U.S. where subscriber growth has leveled off somewhat. The company said that 83% of its net paid subscriber additions in 2020 came from outside the U.S. and Canada.