Many streaming providers offer almost endless amounts of content for anyone to explore for a monthly fee. Which service you use is dependent on what partnerships each provider has with movie production companies. Netflix is dropping some well-known movies from its service, and many of these movies are from Epix (a partnership between MGM, LionsGate Entertainment and and Viacom’s Paramount).
“We hear from our members that you wish we had newer movies. So do we. Studio licensing practices means it often takes more than a year before consumers can watch a theatrically released movie when and how they want,” said Ted Sarandos, Chief Content Officer at Netflix, in a blog post. Sarandos explained that Netflix’s shedding of content means that many high-profile and popular movie series will leave the provider. “We have decided not to renew our agreement in the US with Epix, the cable network, which means that some high profile movies including Hunger Games: Catching Fire, World War Z and Transformers: Age of Extinction, will expire at the end of September in the US. If you want to see them on Netflix US, now is the time,” he continued.
Why is Netflix shedding content? Sarandos explained that these movies can be seen elsewhere, and are shifting their focus to host exclusive content. “While many of these movies are popular, they are also widely available on cable and other subscription platforms at the same time as they are on Netflix and subject to the same drawn out licensing periods. Through our original films and some innovative licensing arrangements with the movie studios, we are aiming to build a better movie experience for you,” he continued.
Netflix is, in addition to focusing on exclusive content, planning to replace some of the dropped content in 2016. “Starting next year, we will be the exclusive US pay TV home of the latest theatrical movies from the The Walt Disney Company, including Pixar, Lucasfilm and Marvel movies. The majority of these films will arrive on Netflix faster than traditional arrangements had previously allowed,” Sarandos said.
Netflix’s competitors are taking note, and the same day that the agreement with Epix ended, Hulu decided to strike a multi-year agreement with Epix. “Hulu already offers some of the best and biggest titles in television programming, but our subscribers have been asking us for more, and more recent, big movies. We listened. Through this new deal with EPIX, we are proud to now be able to offer a huge selection of the biggest blockbusters and premium films,” said Craig Erwich, SVP, Head of Content at Hulu. “This is a landmark deal for Hulu and it marks a huge expansion for our offering of premium programming.”
This shows the difference between the two companies—Netflix wants you to watch its original content, while Hulu and Amazon are willing to take on cable television and DVD/Blu-Ray releases. This could be a reaction to Netflix’s free-fall in the stock market: the share price has been down 14 percent since August 27. While Hulu and Amazon have announced new tiers of service for their customers, Apple is also seeking to enter the original programming market—the company’s $203 billion cash on hand means they are ready to bankroll their entry with their new Apple TV with Siri, which could be announced at Apple’s September 9 event.
BTIG Research analyst Rich Greenfield said that there is an opportunity in the selling off of Netflix stock. “Competition has been the bear thesis for five years-plus,” he said. “We have continually said that the more on-demand, ad-free competitors that develop the better—as it becomes easier for consumers to cut the traditional video bundle or ‘cord,’ the more dollars (become) freed up to spend on services like Netflix,” he continued, saying that all competitors could benefit from the entry of new players in the video streaming market.
While streaming services such as Netflix, Hulu, and Amazon have encouraged people to “cut the cord” because of the lower price points each service offers in comparison to traditional video bundles, exclusive content could be another reason, and Netflix’s focus on exclusive content could make competitors also strike deals to get exclusive content on their respective services as well.