The entertainment world went a bit nuts last week, when Disney announced that they would be pulling all their content from Netflix and starting their on streaming services.
And while anytime Netflix loses a big content deal it makes headlines, it probably doesn’t spell doom for Netflix in quite the way we might have all been led to believe.
Wall Street Analyst David Miller reports this week that Disney and Disney-owned content accounts for an estimated 5% of the total streaming on Netflix. Of course when talking about numbers at this scale, a 5% decrease in total content views can certainly have a major effect, but it’s a bit less terrifying for Netflix, who will likely retain hundreds of millions of dollars from this deal’s end. Using this money to finance more original television shows might end up making up for the decrease in content.
Netflix’s library does continue to get smaller with almost every passing month. Their focus the past year has been far more on bringing original shows to their library and not dealing with third party content rights. These deals are expensive and unreliable, often at the whim of the content owners, as seen recently with the Disney deal.
Instead focusing on their own content library gives Netflix far more flexibility, especially internationally, where new subscribers have complained about the disparity in content libraries across borders. This is something Netflix is hoping to remedy in the coming years, creating one massive international library, to avoid confusion and upset customers.