Netflix transforming into cable TV

Netflix, once synonymous with prestige content, is undergoing a transformation reminiscent of traditional cable channels, incorporating WWE and classic shows.

In a significant shift from its pursuit of prestige content, Netflix appears to be embracing a programming strategy reminiscent of cable channels from the past. With offerings like "Suits," old movies, and a recent $5 billion deal to broadcast WWE's Monday Night Raw, the streaming giant is venturing into familiar territory that echoes the programming landscape of cable TV in the mid-2000s.

This shift is not necessarily negative, drawing parallels to successful cable networks such as Spike TV and USA Network. Both were adept at presenting entertaining old films and TV shows while achieving programming success with WWE, American adaptations of popular international game shows, and shows like "Suits."

However, Netflix's strategy in 2024 reflects a departure from the traditional economics of streaming, introducing elements that bear a resemblance to cable dynamics. The streaming giant's rapidly growing ad business is expected to offset the costs associated with acquiring WWE rights. Netflix co-CEO Ted Sarandos expressed confidence in this move, stating in an earnings call that it would contribute to the expansion of their ad business. Yet, if the ad revenue falls short, subscribers might face the prospect of another price hike, irrespective of their interest in wrestling.

This development highlights a broader programming issue that has been observed in Netflix's approach. Instead of focusing on specific target audiences, as many other streaming platforms do, Netflix has adopted a broad strategy—initially through original content and later by acquiring streaming rights to diverse content, ranging from the troubled adaptation of "Avatar: The Last Airbender" to popular shows like "Young Sheldon" and "Suits."

Netflix's reliance on established successes from other companies raises questions about its original content production. During an earnings call, Sarandos acknowledged the economic advantages of licensed content in the advertising business but emphasized that the most-watched shows on the platform were primarily originals. Despite this, the streaming giant's current programming mix seems to prioritize cost-effective licensed content over a robust lineup of original productions.

As prices for streaming services rise, Netflix faces competition from platforms with more focused content libraries. The choice between Netflix's diverse offering and competitors like Apple TV, Amazon Prime, Disney+, or Paramount Plus becomes crucial, particularly when considering factors such as pricing, exclusive content, and specific genre preferences.

Netflix's current strategy, relying on its sheer size, content acquisitions from other streamers, and a collection of prematurely canceled originals, might face challenges if it continues to be the priciest platform with fewer exclusives. The evolving landscape raises concerns about subscriber retention and the platform's ability to retain its audience in a competitive streaming market.

In conclusion, as Netflix navigates this transition, the recent WWE deal and the inclusion of classic shows indicate a shift toward a more varied content approach. The success of this strategy, reminiscent of cable programming, remains uncertain as Netflix competes for viewer attention and subscription dollars in an increasingly crowded streaming landscape.

With inputs from The Verge