House of Cards, Orange is the New Black and the newer seasons of Arrested Development may be the jewels in Netflix’s crown, but the streaming service doesn’t own the shows. It licenses the programs, meaning that older seasons of the series pop up on other competing services and the foreign rights are sold without the company seeing seeing any revenue.
However, it looks Netflix will soon be more like a studio than an internet destination. Over 20 new original new shows premiering on the service next year will be owned by the company, meaning that the company will be able to control how and where its programs are available, as well as making it available on physical media like Blu-Ray or DVD.
Licensing programs meant that Netflix paid about half of what it would to produce and own programming. However, by shifting to ownership, the company will be a peer of HBO, which is also shifting its model to be more Netflix-like with the launch of HBO Now, a streaming service that bring its network’s offering to internet users.
“We’ve continued to expand our creative role on the shows. Now we’re taking on ownership and production,” Netflix CEO Reed Hastings told Bloomberg.
Netflix could produce as many as 40 shows by 2018, according to UBS. Other analysts see original content as a hedge against other traditional content producers that may withhold their movies and TV series from the company in the future.