“The Netflix effect” is the entertainment industry’s name for the licensing of one company’s movies or shows to another streaming service. It’s a strategy that made Netflix successful before it began producing shows of its own, but that eventually faded, as producers like Warner Brothers/Discovery and NBC/Universal launched their own streaming services.
But in 2023, the deals are back, as streamers search for new sources of revenue. Tech expert Omar Gallaga says shows like “Suits,” “Insecure” and “Ballers” all got a new lease on life after they were licensed by Netflix.
Highlights from this segment:
– When entertainment companies like Warner/Discovery, NBC/Universal and CBS created streaming services, they were no longer willing to license their products to Netflix. They wanted to keep them for their own streamers.
– In 2023, streaming services face more competition and are in greater need of revenue, so they’re licensing shows again.
– The strike by writers and actors has cut into the streamers’ ability to make new shows and generate revenue, so licensing deals ease some of that pain.
