You’ve noticed it. I’ve noticed it. We’ve all noticed it. One week your favorite show or movie is right there on Netflix, easy as ever to access, and the next thing you notice, it’s just gone.
Netflix has started warning viewers of the imminent departure of specific titles, but of course those only inform viewers if they happen to look at that title within a short window before the show or movie leaves the platform.
But why do movies leave Netflix? Well, it’s all part of the streaming entertainment cycle, a cycle that has congealed over the course of the first decade or so of movie and television streaming services.
It’s possible that this cycle will change in the future, but for the moment, this seems like a relatively predictable shuffle, except for when it comes to exclusives, but that’s a topic we’ll come to at the end of the article.
First things first: what’s the reason that so many movies and television shows leave Netflix? Basically, it all has to do with distribution.
Distribution Rights: The Basics
Distribution rights refer to the legal right to distribute a product, usually an entertainment product, in a certain territory for a certain amount of time.
The company or individual with distribution rights for this product then collects revenue from sales of this product, which they split with the rights holder, according to a legal agreement.
So let’s say Joe’s Production Company makes a movie with their own funding, but the company doesn’t know how to get the movie into theaters and onto streaming platforms, and they don’t have the money to handle it themselves anyway.
This is where a distribution company, let’s call it Hamster Films, steps in, a company that already has ties with various theaters and streaming platforms and which is already very familiar with the distribution process in that territory.
Joe’s Production Company negotiates with Hamster Films to work out a revenue split. Depending on the agreement, Hamster films may only have distribution rights in that territory for a few years, after which time the contract is re-negotiated or Joe’s Production Company decides to work with someone else.
And while Hamster Films distributes the movie in the US, other distribution companies sell the movie around Europe.
So when it comes to movies and shows on Netflix, Netflix has purchased distribution rights for certain titles for certain periods of time in certain territories.
These rights are purchased either from a distribution company or from the production company/rights holder.
For example, Netflix might have the exclusive streaming rights for Uncle Buck in the US for a period of six years.
At the end of that agreement, the rights holder of Uncle Buck and Netflix have the option to re-negotiate. But once that original contract expires, Uncle Buck is back on the market, and guess what: there are many other streaming services that want to have huge, varied libraries, and maybe they really want the streaming distribution rights to Uncle Buck. Maybe Uncle Buck is more popular than ever, and having it on their platform could mean an uptick in subscribers.
This is a simplified, extreme example, but that’s the basic idea. Streaming distribution rights go to the highest bidder, and depending on the perceived value of each media property and the rights of each property, they might jump from one streaming service to another in just a few years.
When you’ve noticed that a movie is no longer on Netflix, it simply means that Netflix no longer has the right to stream that movie in your territory.
Over the last several years, many new streaming services have had to establish themselves, or at least attempt to do so, and their success often depends on the titles they can offer to subscribers.
Without enough compelling titles, not enough people subscribe and the service goes under. Competition is fierce, and bids for desirable titles on the market can fetch high prices.
So how can a streaming service continue to compete when they keep losing the distribution rights to popular titles?
Easy: build desirable titles from the ground up.
Bolstering the Selection: Original Content
You’ve no doubt noticed Netflix originals. These are films and shows branded as Netflix Original content.
Netflix hasn’t shared all the precise details of what qualifies as a Netflix Original, but the idea is that Netflix can promise to have the exclusive streaming rights to a certain show or movie for the foreseeable future.
In some cases, Netflix might hold the rights to the movie or show itself, or they might have distribution rights, in perpetuity.
If subscribers take a liking to multiple Netflix Originals, then they might want to remain subscribed for the long-term, even if some of their favorite movies and shows have moved on to other streaming services.
But the big question is whether it will be enough, specifically for Netflix.
Netflix was the top dog in streaming entertainment for years, but as major media companies have set up their own streaming services, pulling from their back catalogs, and in some instances, pulling properties from Netflix.
And when it comes to media production, Netflix is a very small fry compared to the likes of Disney, Paramount, and Warner Bros.
Netflix has of course been betting big on Originals for a good few years now, and some of those Originals have been massive hits. But whether these Originals will be enough to keep Netflix viable for the foreseeable future still remains to be seen. For the moment, at least, they have been.
With all this information in mind, it can actually be very interesting to pay closer attention to which shows and movies wind up on various streaming services. And as a viewer, a good way to judge the chances of success of a streaming service is whether you personally feel motivated to subscribe to it.
Streaming services do tend to target specific age groups, but every service wants to have as many subscribers as possible, across every age group.
The streaming wars are on, and they definitely haven’t been decided quite yet.