Netflix: A Cautionary Tale for Private Labels

Posted on January 8, 2019

We’ve written a lot about Netflix lately. It’s only a week into the New Year, and the company is having a big year. Bird Box was a wild success despite being a mediocre movie, and Black Mirror: Bandersnatch has forced customers to rethink what constitutes a movie. With Season 3 of Stranger Things coming in July and shows such as Mindhunter and BoJack Horseman coming at some point, 2019 is poised to be a big year for the streaming giant. However, all is not as calm as it seems. You see, the stream wars are coming, and Netflix may suffer. 

It seems as if Netflix is putting out 30 new shows a week and 10 movies. The number of these can be overwhelming, and it can often lead you to wonder, “Who is watching these?” It is sort of a throw shows at the wall to see what sticks approach. That’s by design. But why do that? 

If you look at the top-rated shows on Netflix, the top five list includes familiar favorites — The Office, Friends, Parks and Recreation, Grey’s Anatomy, and New Girl. If you’ve used Netflix at all, you’ve probably seen these shows. The problem? None are owned by Netflix. The Office, Friends, and Parks and Recreation are owned by NBC, Grey’s Anatomy is owned by Disney, and New Girl is owned by Fox. If (and quite frankly, when) these networks were to pull this content to create their own platforms, Netflix would be caught flat-footed. You’d have to go to the 14th highest performing show before you got to a Netflix owned property (Orange is the New Black). 

The brilliance of Netflix may end up being its downfall. When it rented these shows from other networks, no one foresaw Netflix becoming so ubiquitous. Now, everyone wants a piece of the pie, with Disney posing the most imminent threat. So to overcome possibly losing its best shows, Netflix is churning new ones out at an unprecedented pace hoping it gets the next The Office, Friends, or Parks and Recreation.

What does this have to do with you? Think of Netflix’s original content as its private label. This is what we’ve warned about selling on Amazon. If you’re selling other people’s products, you put yourself at risk when the plug gets pulled. If you aren’t focusing on and building better original content as a private label, you’re putting yourself at risk of getting The Office taken away. You don’t need to sell someone else’s The Office. Just make your Stranger Things and let your private product do the job for you.