“Suits” was the most-watched show in 2023, indicating that licensed content is becoming a permanent fixture in the streaming industry. According to Nielsen, the USA Network series accumulated almost 58 billion minutes of viewing time last year, holding the top spot on Nielsen’s viewership charts for 12 consecutive weeks. Netflix (NFLX) gained ownership of the drama in July, and it is also available for streaming on Comcast’s Peacock (CMCSA). The resurgence of licensed content appears to have brought the streaming wars full circle, as companies invested billions in creating original content to outpace rivals and attract subscribers. While Netflix has been at the forefront of this effort, with 45% of its viewing in the first half of 2023 coming from licensed titles, the company has ceased licensing its own content. Netflix co-CEO Ted Sarandos stated that the platform’s large subscriber base and recommendation system allowed it to effectively promote “Suits” to its most interested viewers, but he expressed skepticism that the reverse scenario would be as successful. Disney (DIS) is among the competitors adapting to this shift. ABC’s “Grey’s Anatomy” has thrived on Netflix, and Disney procured the international broadcasting rights for “Bluey,” the second most-watched licensed title, from BBC Studios in 2019. However, similar to Netflix, Disney CEO Bob Iger indicated during the company’s recent earnings call that core brands like Disney, Pixar, Marvel, and Star Wars are likely off-limits for licensing, as they provide real competitive advantages and serve as differentiators for the company. Nonetheless, analysts have viewed this strategy as a double-edged sword, noting the company’s high debt levels and challenges in streaming profitability. Read more here.
