Why Netflix is producing original content

  • 1 To gain new subscribers

    Netflix's strategy is to produce high-quality original content that would attract new subscribers since they can't watch the show anywhere else. 

  • 2 To keep their old subscribers

    By producing original content, Netflix is making sure that its older subscribers won't leave since the new, successful shows are a good motive to stay. 

  • 3 To raise its prices in the future

    Netflix is producing original content so as to be justified when it raises its subscription prices in the future. 

  • 4 To invest in new shows

    By producing original content and increasing prices, Netflix will be able to to keep producing ongoing shows through less expensive investments. 

  • 5 The cost of licensing is too big

    Netflix pays a huge sum of money to obtain licenses for the shows and movies it makes available. One way of getting around licensing is to produce original content. See Why Netflix has very few movies

  • 6 It wants to beat HBO

    According to Netflix's chief content officer, Netflix wants to beat HBO, American premium cable and satellite television network, which is one of the main reasons it is producing original content. 

  • 7 To have an exclusive library of shows

    Netflix's aim is to provide subscribers with an exclusive library of shows (like the one HBO has) that they can't find anywhere else, which is why it's producing original content. 

  • 8 It wants its library to be 50% original content

    According to Netflix CFO David Wells, Netflix aims to have a 50-50 mix of original content and licensed shows/movies in 2 year's time. See How Netflix started

  • 9 To have an edge

    By producing original content, Netflix aims to have a competitive edge over other original content media companies such as Amazon Prime and HBO. It also aims to differentiate itself from the other companies through its highly successful original shows such as Narcos and House of Cards.

  • 10 To fulfill's subscribers' needs

    Netflix noticed through its viewer data that subscribers binge-watch serial dramas more than sitcoms, which is one of the reasons Netflix is producing the kind of shows that get viewers hooked. See Why Netflix is so popular