Demand for Netflix originals is catching up to licensed content, study says

Netflix could be facing a licensed content shortfall when Disney, WarnerMedia and others pull back their movies and shows for their own streaming services. But Netflix’s aggressive original content strategy should make up for it.

According to new research from Parrot Analytics and Kagan, a media research group within S&P Global Market Intelligence, demand for Netflix originals is on track to exceed demand for licensed titles on the platform by October, 2019. As the report points out, these findings support Netflix’s goal of having 50% original content on its platform.

Parrot and Kagan arrived at their conclusion after comparing the sum of U.S. demand for both Netflix original series and the licensed titles available on the U.S. Netflix service each month. They noted that currently the most in-demand content tends to be licensed titles, but that the proportion of the demand share from Netflix original titles has generally grown month over month.

Over 12 months, the demand share for Netflix originals grew an average of 1% each month, and from July 2017 to June 2018, Netflix’s reliance on licensed content dropped by 10.9%.

RELATED: Deeper Dive—How Netflix is bracing for the coming licensed content exodus

Along with Netflix, the report found that demand for content on SVODs including Hulu, HBO Now, Showtime and Starz has gone up this year. But unlike Netflix, premium network streaming apps like HBO and Showtime receive the most demand for original series that air on their corresponding linear networks. The study also found the library content is becoming more and more important for these services.

"The future for the industry is likely to be even more crowded and the winners are still unknown," said Deana Myers, research director at S&P Global Market Intelligence, in a statement. "Walt Disney is expected to debut its SVOD service in 2019 and its proposed buy of the studio and libraries of 21st Century Fox will add a vast amount of content to this service. Other anticipated SVOD launches include those by Apple and Warner Media. We estimate the overall US SVOD industry has many strong years of growth in its future, particularly as competition from Disney and Apple could impact the market."