In early December, “Friends” fans experienced their worst nightmare – a small message on their screen told them the show would permanently leave Netflix Jan. 1.
Twitter and Instagram users went wild. Thousands wrote to Netflix saying they would cancel the streaming service if their favorite ’90s sitcom left the platform. After days of user outrage, Netflix responded to the uproar with a simple “Friends” themed tweet.
A picture of the holiday armadillo announced the show would stay on Netflix throughout 2019.
Diehard “Friends” fans rejoiced and all seemed well in the Netflix universe. Then, specifics of the deal came out. In order to keep the beloved sitcom for just one year, the streaming service had to pay $100 million. Prior to this deal, they were paying $30 million a year.
That is a huge amount of money, even for Netflix. For comparison, the next most expensive show Netflix pays for licensing is “Lost,” at $45 million a year. Even some Netflix Originals don’t cost the company that much. It’s reported the first season of “Stranger Things” cost $6 million an episode, or $78 million total. While that is for only one season, Netflix will have the rights to these shows forever.
The most comparable deal is Hulu paying $120 million in 2015 for “Seinfeld,” another 90s classic. The catch with this one, though, it that that deal is good for five years. At the time, that amount of money was unheard of.
Another key statistic is that “Friends” is not even Netflix’s most popular show. While they don’t officially release that information, it’s believed that title belongs to “The Office,” for which they likely pay much less.
The biggest problem with Netflix’s deal with “Friends” is not that they can’t afford it – they definitely can. The problem is the precedent it sets.
Netflix paid that much because WarnerMedia, the company that owns “Friends,” is set to release their own streaming service at the end of the year, and probably wants to keep its most valuable asset to itself. That means the $100 million may have only bought them a year-long delay of the inevitable. Netflix also has to compete with Hulu and Apple – which is also creating a streaming service – for exclusive rights to the show.
With this deal, Netflix showed it was willing to pay whatever it took to keep its most popular shows – and that is a dangerous example to set. It will likely cost them negotiating power, and millions of dollars, in the future.
NBCUniversal, which owns “The Office,” “Parks and Recreation” and other fan favorites is set to launch their own streaming service at the end of the year. They will likely want exclusive access to their shows as well and Netflix might pay even more for their most popular shows. Disney is also launching a streaming service – and they have already announced from now on Marvel movies and other Disney classics won’t be on Netflix in the future.
The future will mean more competition for Netflix and more cost for all the content they have because of it. At some point they will have to stop carrying beloved shows.
I don’t think Netflix will go bankrupt anytime soon, but I do think users will eventually have to pay much more money for much less content. And while I love Netflix Originals, I want more than that.
I think Netflix was wrong to pay such an exorbitant amount of money for one year of “Friends.” I can quote the cult-classic all day, but at this point, everyone who wants to see the show has already seen it – it hasn’t been on the air in 15 years. I know it can be comforting to rewatch old favorites. However, I also want to see new content, and the “Friends” deal may put that – along with access to my other favorite shows – in jeopardy.
Every time a big licensing contract is up, they will have to shell out more and more money – even Netflix has a budget.They can’t keep it up forever. I think it would have been smarter to let the “Friends” contract go. While it would have made some angry, chances are the people will be angry all over again come 2020.
It would have immediately saved Netflix $100 million, and it would have saved them millions in the cost of content in the future. That means more new content and a higher likelihood of keeping other shows. I love “Friends,” but I love Netflix more – and I can think of better ways to spend $100 million.