Netflix gets a better economic return from licensing hit theatrical films, which are more cost effective and hold up better in viewing than its original films, says researcher Ampere Analysis.
“Netflix’s big-budget originals like ‘Damsel’ and ‘Lift’ burn bright but fade quickly,” says a Hollywood Reporter story by Scott Roxborough, summarizing the Ampere report “Unpacking Netflix’s Evolving Movie Strategy.”
The Ampere report says Universal Pictures’ animated hit “The Super Mario Bros. Movie” (pictured above) is one example of an acquired film shining. “Ampere calculated that spend-per-view was, on average, $0.55 for licensed TV shows and $0.68 per view for Netflix original series, compared to $0.12 per view for licensed movies and $0.13 per view for original features,” the Hollywood Reporter article says.
The analysis is complicated because Netflix may not have rights to acquired content in all territories, which would reduce potential circulation and viewing. Thus, acquired studio films are actually more popular on a per-capita basis if blacked out in some territories. On the other hand, originals have the advantage of remaining with Netflix, unlike licensed content that can be used only for contractually set time frames.
Universal’s “Super Mario” grossed $575 million domestically (U.S. and Canada) or $1.36 billion globally after cinema release in April 2023. In 2021, Netflix contracted for an early streaming window for Universal animation features, after a quick run on Universal’s sibling Peacock streamer.
Netflix has an even more expansive deal for quick streaming rights to the output of Sony Pictures Entertainment, which is another of Hollywood’s five legacy major studios. Sony is the only major without a top-tier video streamer so it doesn’t hold back some rights for a sibling streamer.
Hit theatricals have a halo from cinema runs and are perennials for audiences, whether “The Godfather” or “Star Wars” or “Titanic.” Netflix found Universal’s animation titles worth acquiring even after first appearing on rival video streamer Peacock.
According to Ampere, “Mario” ranked 18th overall with just 80 million views in a recent ranking of Netflix viewing. Universal animated hit “Minions” clocked 73 million views, and Sony’s “The Equalizer 3” figured some 54 million views.
The Hollywood Reporter story says, “Looking at successful films, ones that had at least 12 million views at the start of their run on the platform, over a one-year period from H1 2023 to H1 2024, Ampere found that [Netflix] originals started higher — with an average of 30 million views — but fell off quickly, averaging just 9 million views a year on. Acquired hits, by contrast, drew 20 million views on average on launch but were stronger a year in, with an average of 12 million views, ‘suggesting acquired movies have a long-term appeal.’”
Netflix remains committed to making original movies, though volume has varied. Hit TV series are more valuable, given their bulk and long runs compared with one-shot movies. But original movies are useful to plug gaps in schedules and audiences want some one-shot content.
The risks of original films are evident with “The Electric State,” which is a huge-budget made-by-Netflix film that turned out ho-hum. “The plot is a watered-down grab-bag of old, tired ideas,” wrote Johnny Oleksinski in a New York Post newspaper review panning the sci-fi yarn.
“Electric State” reportedly cost $320 million to produce, making it the 13th most expensive film of all time, inflation adjusted. It’s from hitmaking brothers Anthony and Joe Russo, who work the successful “Avengers” movies for Walt Disney Studios.
Says the Hollywood Reporter story citing Ampere data, “Netflix appears to be shifting more towards acquisitions in its movie strategy, with original film commissions, measured by the number of titles, at 105 last year, 45 percent down from an all-time peak of 190 commissioned titles in 2021. Acquired titles accounted for 84 percent of the streamer’s global film catalog last year, the report found, up from 80 percent in 2023.”
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