In the past year, Netflix has released the Emmy-nominated political drama House of Cards, the Eli Roth-produced horror series Hemlock Grove, and the surprise hit of the summer, Orange Is The New Black. They’re also in the process of adding a bunch of exclusive comedy to their streaming options and are about to premiere season 2 of the less-popular but still buzzed-about Lilyhammer.
Next year, Netflix is set to premiere a bunch of new original content as well. This includes a Marco Polo drama that they snatched from Starz, a Pablo Escobar drama called Narcos, and a new sci-fi series from the creators of The Matrix called Sense8.
What does all of this exclusive, original content mean for Netflix? According to one analyst, it means happy customers.
Happy customers that have no desire to unsubscribe, more specifically. RBC Capital analyst Mark Mahaney says that this massive push into original content will reduce customer turnover and lead to higher earnings. That’s why he’s bullish on Netflix’s future stock performance.
RBC Capital is basing their statements on original content and low user turnover based, in part, on a survey where 80% of Netflix customers called original content “extremely, quite, or moderately important” when it comes to deciding whether or not to keep paying that monthly subscription fee.
In April, shortly after House of Cards debuted, Netflix said that they saw very little “free-trial” gaming in order to binge-watch the series. In other words, people who subscribed generally stuck around. Another survey found that 86% of Netflix users said that House of Cards made them more likely to stick around and keep subscribing.
I guess if you produce great content, and a lot of it, people are willing to pay for it.
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