“SUITS” was the most streamed title of 2023, a sign that licensed content is here to stay.
According to Nielsen, a third-party ratings service, the USA Network series topped the Nielsen ratings chart for 12 consecutive weeks last year and was watched for approximately 58 billion minutes.
Netflix (NFLX) acquired the show in July. You can also stream it on Comcast's Peacock (CMCSA).
The report added that “Suits,” which aired from 2011 to 2019, surpassed “The Office” to become the most streamed title of all time. “The Office'' generated 57.1 billion minutes of viewing time in 2020.
Other top licensed shows include “Bluey,” “NCIS,” “Grey's Anatomy,” “Cocomelon” and “The Big Bang Theory.” Apple TV+'s “Ted Lasso” (AAPL) topped the list of original series with nearly 17 billion hours of viewing.
The resurgence of licensed content appears to have brought the streaming wars full circle after companies spent billions of dollars creating original IP to outsmart competitors and attract subscribers.
As content budgets shrink across the board, licensed content can also attract viewers during new seasons of original series.
While Netflix is certainly responsible for that, the company recently revealed that 45% of all viewing on Netflix from January to June 2023 was from licensed titles. We are actively stopping licensing out of our own content.
“It's interesting that a show like 'Suits' has been on the air for a long time in the US, even though it's available on Peacock and it's been available on Amazon for years before it came to Netflix. “What we've been able to unlock is this huge, huge global audience,” Netflix co-CEO Ted Sarandos said on a call with reporters late last year. He spoke at
“It's a combination of our large subscriber base and a recommendation system that we knew would put SUITS in front of the people who would love it the most,” he continued. “I don't think it necessarily happens the other way around. I think you can add a lot of value by licensing content. I'm not saying it's reciprocal.”
Sarandos reiterated that idea during the company's earnings call last week, saying the streamer is “open to business” when it comes to licensing content from competitors.
“I'm glad that studios are becoming more open to licensing again,” he said.
Disney (DIS) is one competitor that is actively embracing this change.
ABC's “Grey's Anatomy” has been a huge success on Netflix, while Disney acquired the international rights to “Bluey,” the second most-watched title of 2019, from BBC Studios.
Disney CEO Bob Iger confirmed that further plans are in the works, particularly regarding a partnership with Netflix.
“We do in fact license content to Netflix and we intend to continue to do so,” he told investors on the company's latest earnings call. “We are currently in discussions with them about some opportunities, but we do not expect them to license our core brands.”
Similar to Netflix's refusal to license out original series, Iger said Disney, Pixar, Marvel, Star Wars, and others all offer “a real competitive advantage” and are “differentiators” for the company. Because of this, there is a high possibility that entry will be prohibited.
”[Those brands] Everyone is doing very well on our platform.And I don't know why we would do that, we should, to basically chase gold [license them out] When those are really, really important building blocks to the present and future of our streaming business. ”
But analysts say that idea is a double-edged sword, citing high debt and streaming profitability challenges.
In a new drop in Warner Bros. Discovery's stock price on Monday, Wells Fargo analyst Steve Cahall said the company's new stock price for legacy players is on the rise as companies weigh licensing content versus keeping streaming exclusive content. Explained that future content strategy poses risks.
“One way to accelerate EBITDA and free cash flow is to have big-name titles like “The Sopranos,'' “Game of Thrones,'' and “Friends'' distributed to deep-pocketed streamers rather than Max. “There's probably billions in untapped revenue potential,” Cahall said. He said this about WBD. “But this will come at the cost of Max's involvement.”
Bank of America analyst Jessica Reif Ehrlich said content licensing is a “back-to-the-future” trend for the industry as a whole, as large legacy companies consider their options.
“This should improve return on investment on content spending and accelerate future revenue and profitability growth,” she said in a note published earlier this month.
alexandra canal I'm a senior reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, Email alexandra.canal@yahoofinance.com.
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