Earlier this week, Netflix Canada made headlines after it was revealed that they'd be removing the beloved sitcom "Friends" from their roster. As a result, thousands of Netflix users took to Instagram, Twitter and Facebook in a global plea to stop the streaming service from getting rid of the show come 2019. As a result, Netflix caved and promised it would be back for another year. But that isn't necessarily a good thing.
Netflix first got the rights to stream "Friends" back in 2015. At that time, they paid $30 million for the rights to the ten seasons. In order to keep the show this time, Netflix had to hand over a whopping $100 million to keep the rights for only one more year.
While it may seem that Netflix is a profitable company that can afford to spend that much on a show, they aren't.
In fact, Netflix has been struggling with growing their revenue as fast as the company is. For example, back in September of 2017, the company reported a $1.855 billion loss as a result of operations costs. In fact, Netflix has been losing money for the past three years.
There are several reasons why Netflix struggles so much with generating revenue. For one, since people can share a membership by giving their password to friends and family, that limits the amount of monthly membership money the company can bring in. On top of that, without advertisements, Netflix doesn't have many ways of making money other than their membership fee.
This can become a problem when you have to buy the rights to shows to get content on your streaming site. It can become an even bigger problem when you spend $100 million on one that hasn't had a new episode in over a decade.
While the move might have satisfied customers for this week, let's be honest. "Friends" is a good show, but it doesn't get the same amount of traction that new releases would receive.
Consider cult favourite, "Stranger Things" - a show that rakes in tons of viewers and cost Netflix $48 million for season two, under half of what they had to pay for "Friends".
Keep in mind that Netflix uses a significant amount of data analytics in order to make their decisions on whether to keep or drop certain shows. Meaning that if they were planning on getting rid of "Friends", it was for good reason.
Public outrage proves that a lot of users like to have the option to watch "Friends" on Netflix. But, it doesn't prove that fans will watch it as much as Netflix needs them to in order to make that $100 million investment worthwhile.
Also considering that Netflix judges a show's success by how much a show generates new membership purchases, it's also worth wondering if enough people buy Netflix memberships to specifically watch "Friends" when the show is readily available on cable.
Aside from "Friends" fans overjoyed with the news that their favourite 90's show was safe from the chopping block, there are many other Netflix users who acknowledge that this might not have been the best decision for the streaming service:
Honestly so true I binged watched Friends on Netflix once then never watched it again now there goes 100 Mil that could’ve been used for really cool movies and shows— Moustafa Elhadary (@MoustafaHadary) December 6, 2018
Huge Friends fan, but ur not wrong !— 𝔅𝔞𝔡𝔢𝔯 (@melodylyricz) December 6, 2018
They should’ve just took it out without even announcing like these people swear like it’s not on TV everyday or they can’t find it online. We could’ve had new seasons of shows or movies but noooo people wanna complain on a show they watched 3+ times. It’s never that serious.— C☀️ (@mamicitlaly) December 6, 2018
Me thinking of all the content we could have gotten pic.twitter.com/BX7z2z7zqC— shaneth (@ShaneSpiering) December 6, 2018
they’re really billions of dollars in debt and they decided to spend $100 million on a show? LMAOOOO— ｍａｄｄｉｅ (@lilmaddsss) December 6, 2018
The reality of the matter regardless of whether you want "Friends" on Netflix or not, is that with years of a lack of profitability under their belt, spending $100 million on an older show instead of spending that money on new content was a mistake.
What has helped Netflix get a leg up against other streaming competitors has been their investments in original series and movies. The investment in "Friends" will surely eat into the budget for Netflix originals. So, if anything, this latest move brings the company a step backward.
*The opinions expressed in this article are the author's own and do not reflect the views of Narcity Media.