Streaming platforms are spending millions, if not billions of dollars to acquire successful TV shows from the 90s and 00s. While these shows certainly struck a chord with audiences in their heyday, one has to wonder if nostalgia, in and of itself, is a viable business model.
When The Wall Street Journal revealed that the most watched TV series on Netflix was The Office, the Internet had a big laugh:
On Twitter, many people pointed out the irony that a viewing platform that spent billions to produce original shows would end up with subscribers who prefer the comforting feeling of old sitcoms of yore.
This phenomenon isn’t limited to Netflix. In fact, every over-the-top (OTT) TV service is going out of its way to get its hands on old TV shows:
- Peacock (NBCUniversal) recently bought The Office from Netflix for $500 million over 5 years.
- HBO Max (WarnerMedia) managed to grab Friends for $425 million over 5 years, and apparently spent over a billion dollars for the exclusive rights to The Big Bang Theory.
- Netflix retaliated by acquiring Seinfeld for $500 million over 5 years.
Such a bidding war is attributable to the arrival on the OTT market of new, major players such as Disney+, HBO Max, Peacock, Apple TV+ and others. Thus far, the strategy has been to fill airtime with old TV shows.
“All our strategic decisions, especially at the beginning, aim at ensuring that viewers reconnect to our heritage”, Bonnie Hammer, Director of Digital Platforms at NBCUniversal, said to Deadline.
But is this really a wise strategy?
The appeal of comfort food
Using recycled content to feed a viewing platform is nothing new.
“US television has always been a mix of new and recycled shows, says Amanda Lotz, author of We Now Disrupt This Broadcast: How Cable Transformed Television and the Internet Revolutionized It All. The business has been based on revenues generated from selling shows again and again. Until the late 90s, there was nothing (scripted) on cable but “recycled” shows.”
vMedia co-founder George Burger, who follows TV trends, explains the usefulness of such an approach: “Back then, networks were trying to fill airtime by purchasing licences for shows that featured many episodes.”
However, in this era of online viewing, such reasoning obviously no longer holds water. And yet, successful shows remain as relevant as ever:
“The turn rate of streaming platforms remains very high, which is a problem. People subscribe to an OTT service for a few months, binge watch their favourite shows and then cancel their subscription. These services are thus trying to find ways to lure viewers into coming back every night. The old shows are meant to encourage engagement, and sitcoms work particularly well in that regard. For viewers, it’s the equivalent of comfort food.”
The strategy seems to be working, as Netflix viewing habits published by The Wall Street Journal tend to demonstrate. Indeed, The Office and Friends both cumulate way more viewing hours than such homemade fare as Orange is the New Black and Ozark.
The limitations of nostalgia
Amanda Lotz isn’t all that sure that old TV shows really do result in greater viewer engagement toward a particular platform:
“I suspect a lot of the Friends and The Office viewing is more of the “video on in the background” variety, especially for those people who are watching them again. Those hits were designed for wide appeal. They may be watched by a lot of people, but I’d be surprised if many would describe them as crucial to their viewing habits (I know from my Twitter feed that some people claim they are, but I suspect it’s more of an exception). Those same people also likely value Netflix and others for their new shows, which they might watch with greater interest.”
George Burger points out the limitations of a broadcasting model that would be based solely on nostalgia and recycled content:
“You always think you want to watch your favourite shows from 20 years ago, and yet you end up not devoting all that much time to them. When video stores started opening everywhere, I remember thinking: wow, I can catch up with all my favourite old movies. But that feeling doesn’t last. And that’s not a sustainable business model. Eventually, 80 percent of what you found in video stores was less than a month old.”
For Burger, an OTT platform invariably needs to produce original content in order to stand out:
“You need some kind of a tent-pole, a locomotive that drives audiences to the platform. Netflix became popular because of shows like House of Cards, while HBO hit pay dirt with The Sopranos. These platforms will always need powerful, original stuff.”
Will the battle of recycled content launch the streaming wars?
When Netflix decided to invest massive sums of money into producing original content, the goal wasn’t so much to generate buzz or meet its subscribers’ expectations, as to protect its future interests:
“Netflix’s move from distribution to a production and distribution model is based on the fact that, once they had demonstrated that there was a business in streaming, they realized they were at the mercy of the studios for content. They anticipated the current trend, where studios want to be their own distributors.”
Indeed, with the arrival on the market of several new OTT platforms, Netflix’s catalogue has somewhat been depleted. And these new players certainly don’t intend to stick to recycled content. Peacock, HBO Max and Disney+ are all investing massively in the production of original shows (a good example being The Mandalorian, a series based on the Star Wars saga, that cost more than $100 million to produce).
The battle for recycled content will therefore not constitute the first salvo in a war for content that has far greater ambitions: to make audiences laugh, dream and, most of all, discover exciting new fictional worlds.