Netflix is in the midst of a big transition.
While Netflix gained much of its past dominance in the streaming space by letting you binge-watch reruns of old shows and movies, the company has increasingly pivoted toward its own original content. That isn’t new for Netflix, which has constantly reinvented itself since it debuted its DVD-by-mail service in 1998.
Netflix executives have said, on many occasions, that they believe original (and exclusive) TV shows and movies are the best way to provide value to its subscribers moving forward. That’s why Netflix will release 600 hours of original content this year, including 31 original shows, roughly double its 2015 output.
But how are subscribers reacting to the shift in Netflix’s programming? According to research by RBC Capital Markets, they approve. In a recent survey, 49% of Netflix subscribers thought Netflix’s content had improved over the last year (further breaking that number down, 30% said it had “greatly or moderately improved” with the remainder answering "slightly improved"). Only 10% thought content had gotten worse. The rest of the surveyed subscribers thought the quality of Netflix's content had "stayed the same."
As you can see, this most recent survey is consistent to trends RBC has seen in the past, indicating that Netflix hasn’t seen a drop in subscriber happiness as it remakes itself, despite trimming its catalog by over 30% since the start of 2014.
60% of respondents told RBC that original content was important to their decision to remain a Netflix subscriber (up from 46% two years ago). 24% said original content wasn’t important. RBC says it expects original content to be “more impactful” moving forward.
That’s what Netflix is betting on.
Last fall, Netflix CFO David Wells said the company had found originals to be “much more impactful” relative to licensing, and the company has jumped headfirst into this area.