This development not only highlights the rapid growth of Netflix but also underscores the long-term licensing potential of its vast content library.
Recent research by Parrot Analytics shows that Netflix has surpassed a legacy studio in Corporate Demand Share (demand for all original TV content produced under a company’s corporate umbrella), signaling a pivotal shift in the entertainment landscape. According to data from Parrot Analytics, Netflix claimed 9.6% of the demand for original TV content in Q3 2024, overtaking NBCUniversal, which stood at 9.0%. Given that NBCUniversal’s programming dates back to the 1940s and Netflix launched its first original only in 2012, this is a significant milestone. This development not only highlights the rapid growth of Netflix but also underscores the long-term licensing potential of its vast content library.
As subscriber growth stalls across the industry, churn rates have become a critical metric. Parrot Analytics reports that Netflix’s churn rate in the UCAN region (United States and Canada) declined in Q2 2024, while competitors like Max and Peacock saw increases. With UCAN being the most lucrative and saturated market for streaming services, Netflix’s ability to retain subscribers will be essential to maintaining its competitive edge.
One key factor contributing to Netflix’s lower churn rate is its high percentage of exclusive content. As of earlier this year, 87.3% of Netflix’s content was exclusive, a figure that leads the industry (excluding Apple TV+, which has an almost entirely exclusive library). This level of exclusivity is crucial for Netflix to keep its audience engaged and prevent them from drifting to rival platforms.
Demand for original content plays a significant role in subscriber growth, yet the global supply of streaming originals has seen a marked decline. In fact, Q3 2024 represents the sixth decline in seven quarters for original programming releases. The slowdown is attributed to a combination of factors, including the aftermath of Hollywood strikes and strategic shifts by major studios away from expensive, high-risk original projects.
Despite the overall downturn, Netflix remains the dominant player in the original content space. In Q3 2024, 21.2% of all new streaming originals were Netflix productions, a significant increase from 14.0% in the same period last year. Amazon Prime Video came in second with 13.1%, followed by Disney+ at 9.6%. This dominance is largely due to Netflix’s deep pipeline of content, a focus the company has maintained even as competitors scale back their investments.
In addition to original content, licensed broadcast series continue to perform exceptionally well on Netflix. In Q3 2024, shows like Grey’s Anatomy (ABC), Seinfeld (NBC), and NCIS (CBS) made up just 1.0% of Netflix’s U.S. catalog but accounted for 7.0% of total demand. By contrast, international series, which make up 61.7% of Netflix’s U.S. supply, contributed 27.8% of the demand.
Looking ahead, Netflix’s most successful international original, Squid Game, is set to return in December. The release of Squid Game Season 2 will be a crucial test of whether Netflix can sustain the success of non-English content, a key pillar of its international growth strategy. If the new season can replicate the demand of the original, it could open doors for other non-English content to gain a stronger foothold in the U.S. market.
Analysing supply share, Netflix’s supply share of all streaming original premieres ticked down slightly in Q3 2024, but it remains the dominant player in this space. As recently as Q3 2021, Netflix accounted for 30.2% of all new streaming original titles released globally. Fast forward to Q3 2023 and Netflix’s share of new streaming originals worldwide was down to 14.7%.
However, Netflix reversed this trend big time starting in Q4 2023, and has accounted for over 20% of all new streaming original releases in three of the past four quarters. This coincided with Netflix’s first increase in originals demand share since before 2020. This was clearly the result of Netflix having a deep roster of new content in the can — something co-CEO Ted Sarandos emphasised repeatedly in 2023 — and a more global footprint than its competitors.
