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Netflix has won the streaming wars

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Dec 12, 2023
An illustration of Netflix flexing its muscles.

Illustration: Rebecca Zisser/Axios

Amid heavy pressure to make streaming businesses profitable, media giants are once again relying on licensing deals with Netflix even as they compete with the streaming giant for subscribers.

Why it matters: The rush for these deals means the so-called streaming wars are effectively over, with Netflix the victor.

Driving the news: Disney is close to a licensing deal with Netflix for 14 older series, including "This Is Us," "Lost" and "Home Improvement," Variety reports.

  • As part of that deal, Hulu will gain rights to 19 seasons of "Grey's Anatomy" that it will share with Netflix on a non-exclusive basis starting in March.
  • It's a full-circle moment for the streaming era: It was Disney walking away from a major licensing pact with Netflix in 2019 that signaled studios would compete with the streaming leader. Now Disney's back.

The big picture: The clock has been ticking for media companies to start making real money off their streaming endeavors as their legacy businesses decline faster than expected.

  • Disney, Comcast and Paramount have promised investors that their services will start to become profitable by 2024 or 2025.
  • Warner Bros. Discovery said Max was "slightly profitable" during its most recent quarter, but it was not enough to make up for losses elsewhere.

Zoom in: It's not just Disney that has resumed sharing its library with Netflix.

  • Warner Bros. Discovery has been licensing numerous titles to Netflix this year as it seeks to pay down its heavy debt load, including older HBO series like "Insecure" and "Six Feet Under" and even some of its newer DC catalog like 2022's "The Batman."
  • One of Netflix's biggest shows this summer was the legal drama "Suits." The former USA Network drama, which ran for nine seasons from 2011-2019, saw a resurgence in popularity after it debuted on Netflix in June.
  • It had previously been available on Peacock and Amazon Prime Video.

Between the lines: Since the early days of streaming, Netflix has viewed itself as a friend to the entertainment industry for its ability to pump up older shows and turn duds into hits.

  • "Sony right now is making a movie of Cobra Kai. Why do you think they're doing that? Because Cobra Kai was a monster on Netflix," Netflix co-CEO Ted Sarandos said during last week's UBS conference. "That was IP that had failed elsewhere."
  • NBCUniversal is also developing a new "Suits" series due to its Netflix resurgence.

The bottom line: The streaming wars have only proved how essential Netflix has become to the entertainment industry.

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