What Would Netflix Do Without ‘Friends?’

Netflix faced questions about the shifting media landscape during its earnings release, held a week after WarnerMedia announced plans to launch a competing service in a move that follows in the digital footsteps of The Walt Disney Co.

One issue, in particular, loomed large for Wall Street: What will Netflix do to fill the hole in its content library, once Disney and WarnerMedia claw back their movies and television shows for their own on-demand services?

“Content like Friends is likely to disappear from Netflix in 2019 as WarnerMedia launches its own SVOD service,” wrote BTIG media analyst Rich Greenfield of BTIG, in an analyst note released ahead of the company’s earnings interview. “As more content creators launch their own SVOD services, how should investors think about the impact of losing high-profile syndicated content?”

The loss of Friends is, in streaming services as in life, would be a blow.

The Warner Bros. Television show first aired in 1994 and ran for 10 seasons on NBC. The show’s appeal is undiminished, all these years later. The measurement firm Parrot Analytics said it’s the third most popular sitcom in the U.S., behind Brooklyn Nine-Nine (#1) and Big Bang Theory (#2).

The top 10 most in-demand sitcoms in the U.S. from Aug. 17 through Oct. 15 Parrot Analytics

The same is true in the UK, where Ross, Rachel, Monica, Joey, Chandler and Phoebe are as popular as always. The sitcom beat more contemporary shows to top the list of the UK’s most popular shows on streaming services, according to an Ofcom Media Nations report.

It illustrates the challenge confronting Netflix, as it searches for replacements for iconic entertainment brands.

“If all the ‘Netflix Killers’ out there band together and take back their franchises, that would be a serious blow to Netflix,” said Peter Csathy, founder of CreaTV Media, a digital media consultancy. “Kids and family viewing on Netflix represents a surprisingly high number, and kids watch franchise content over and over again. Netflix parents are happy to pay for that kind of babysitting so long as the content is there. If Disney princesses, Star Wars, Marvel, DC Comics, Pixar and other mega properties pull out of the Netflix universe, Netflix most certainly would feel that. “

UBS analyst Eric Sheridan, who conducted Netflix’s third quarter investor interview, asked Chief Content Officer Ted Sarandos about the evolving market for acquiring content.

“We’ve been a pretty dependable buyer,” Sarandos said. “Increasingly, some of those sellers have become complicated sellers, meaning there are conflicts within their own companies about what they want to sell and when they want to sell (in which windows).”

Sheridan asked how Netflix planned to replace the movies and TV shows, once studio partners begin pulling content off the platform. Disney said it plans to incorporate Disney, Marvel and Star Wars titles in its family-friendly streaming service, scheduled to launch this fall. WarnerMedia plans to debut its service, anchored by its vast repository of film, television and animated content, by the end of the year.

Sarandos talked about the company’s well-known, multi-billion-dollar investment in original content, saying, “Some of our biggest brands, like Stranger Things, are owned and produced in-house, but we are still licensing a lot of content.” He said Netflix is having success producing in new types of content, such as unscripted programming.

Queer Eye, Fastest Car, Nailed It, Sugar Rush. These are all shows that people love in enormous numbers around the world,” Sarandos said. “And we don’t have to go through the gun-to-the-head renegotiations.”

Sarandos also sees potential opportunity partnering with public broadcasters like the BBC, noting that Netflix just announced it had secured the rights to Dracula, a three-part series from the creators of Sherlock, Steven Moffat and Mark Gatiss.

“We think we can be great partners with local public broadcasters and networks around the world,” Sarandos said.