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COMMENT Sorry for any disruption caused: Netflix strikes again Netflix helped to change the TV landscape with its OTT subscription video-on- demand (SVOD) service and its ‘Originals’. Could it be about to change things again by making programmes in-house? by Peter Savage I t might seem obvious to say it but what we used to call ‘television’ is currently changing at great speed: and it’s all down to the Internet. With the adoption of fast broadband across Europe, new broadcasting models, particularly ones that go over-the-top (OTT), are being developed and deployed, generally to great success. By bypassing broadcasters completely, content aggregators such as Netfl ix, Amazon Prime and Hulu - as well as niche movie channels like Mubi or the Berlin Philharmonic’s Digital Concert Hall - are reaching viewers directly, giving them a far greater choice. This has caused signifi cant disruption to the established broadcast market. As a result broadcasters are modifying the way they distribute and sell their content. And now those same disruptors, particularly Netfl ix, having changed the way viewers watch television are now having an impact on the way we produce it too. First, some numbers. In 2016 Netfl ix is expected to spend $5bn on content. According to research by Ampere Analysis, this fi gure is likely to rise by another $1bn in the subsequent two years. Until recently, it devoted the majority of its money (roughly 80%) to licensing pre-made movies and shows with the rest going towards funding, part-funding and commissioning ‘Originals’. The latter is how it came to show House of Cards (produced by Media Rights Capital and Trigger Street 40 | KITPLUS - THE TV-BAY MAGAZINE: ISSUE 107 NOVEMBER 2015 Productions), Orange is the New Black (Lionsgate Television), and Unbreakable Kimmy Schmidt (Universal Television). The crucial element about these programmes is that they are ONLY available on Netfl ix. For Netfl ix, exclusivity is everything. By the end of this year it will have offered somewhere in the region of 320 hours of original content. This is considerably less than a broadcaster such as Channel 4 (3,171 hours) but signifi cantly more than most streaming services. However, there is a problem. As a funder/ commissioner, working with independent producers and studios, it can usually only buy the rights for a specifi c territory and it gives up its exclusive rights after a certain time period (that being how the majority of commission agreements are structured in the age of Terms of Trade etc). And that doesn’t fi t with the model. In some cases it has tried to negotiate contracts whereby it takes all the rights: fi rst, second and global. But, unsurprisingly, Indies don’t like that (even if they do get a big cheque upfront). This might go some way to explaining why Netfl ix is said to be considering doing more of its production in-house in the future. It has made documentaries and comedy one-offs that way before. And Bloomberg has reported that an upcoming talk show will go the same way.