Age Matters: How Should Streamers Balance Old and New Library Content?
Believe it or not, but the age of content on a platform can help identify strategy. For example, the U.S. libraries of Netflix (57.8%) and Apple TV+ (54.7%) lead all eight premium SVOD services in TV series that last released a new episode in the past one to five years, according to Parrot Analytics. This stockpile of recent TV shows on the supply side aligns with audience demand trends; Apple TV+ (95.8%) and Netflix (51.1%) lead all services in demand generated for TV originals. Both services deliver a steady stream of in-house exclusives as the primary focus of their programming strategy.
Peacock and Paramount+ are among the industry leaders in both TV shows that released an episode in the last 12 months and TV shows that last aired more than 10 years ago. At first glance, this might seem counterintuitive. But the former is because these streamers have largely become destinations for next-day airings of current NBC and CBS titles, respectively, while the latter is partially due to the programming libraries each company has built up over decades. Streaming originals account for a very small percentage of overall TV demand for both. This leaves the two sub-scale platforms in an awkward position within the greater industry conversation.
Scripted programming is being increasingly downsized on linear TV. This will eventually leave Peacock and Paramount+ with less and less next-day air content to generate weekly intentional engagement and long-running library shows that elicit more passive consumption. That’s problem number one. Problem number two is a bit trickier.
Both NBCU and Paramount Global are flush with older library shows that still generate significant demand and viewership, such as The Office or NCIS. The problem is that they work better at retaining subscribers than driving new subscription growth, which is largely done by splashy exclusive originals. These sort of titles are great licensing options to generate revenue, but don’t necessarily help the smaller streamers reach consistent profitability. Broad appeal breakout commercial originals are expensive and difficult to deliver. While Poker Face, The Traitors, Star Trek shows and Taylor Sheridan’s growing empire of Neo-Westerns have all helped their respective platforms, neither are in spitting distance of Netflix or Amazon in terms of original demand share. This puts a ceiling on their growth.
A hypothetical combination of both services (which already exists in certain European markets as SkyShowtime) wouldn’t necessarily solve this problem despite a global subscriber count of around 100 million. From both a supply and demand standpoint, the combo offering would still mostly rely on next-day air for a select few breakout linear originals and older legacy programming, which might be better utilized as licensing fodder. A strong AVOD tier is possible if non-exclusivity is emphasized in licensing, yet it remains to be seen what sort of value proposition consumers would be getting, particularly for international audiences. Can operational costs be kept at a low enough level that a library-driven streamer can be consistently profitable?
These are some of the big questions facing legacy media companies and, unfortunately for them, they don’t come with simple solutions.
