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How original content has been the secret of Netflix' success

In the seven or so years since Netflix began its streaming service, it has become one of the most successful companies in the video on-demand market.

It has an ever growing catalogue of films and TV shows, one which it has been supplementing since 2013 with its own original content. From House of Cards to this week’s Daredevil, Netflix's shows have garnered nothing but praise from critics and fans alike.

This original programming has a been a key to Netflix's success. Netflix's main competitors, Amazon Prime and Hulu, are certainly not standing down; both companies are producing original content of their own. However, Netflix still seems to be the most preferred service.

A recent study by Strategy Analytics Consumer Metrics (opens in new tab) revealed that Amazon Prime subscribers are more likely to watch Netflix than the Amazon service. Meanwhile, Hulu is currently restricted to the U.S., severely limiting its market potential. In contrast, Netflix operates in over 40 countries and has over 50 million subscribers globally.

Netflix began developing original content in 2013 with House of Cards, Orange is the New Black, and Hemlock Grove, each of which is getting a third season this year. Including Daredevil, Netflix now boasts 14 original TV shows (opens in new tab) (five of which are designed for children) with very little genre cross-over (if any). This does not take into account their continuations nor the assorted one-off specials, which number in the dozens.

Compare this to Amazon Prime's current original offerings (opens in new tab) - nine shows of similar genres and mixed reviews. Hulu hasn't fared much better, with 10 original shows (opens in new tab), of which only four have been renewed, with most ending after their first season.

So what is it that has made Netflix, and more specifically, its original shows, so successful?

The very simple answer is this: Netflix knows what you’re watching. Last year, The Atlantic published an article detailing how Netflix creates those uber-specific genres (opens in new tab) you see popping up on your feeds. It included several graphs and charts that demonstrate just how much information Netflix is collecting from its users, and how detailed that information is.

According to Todd Yellin, VP of Product at Netflix the goal was to "tear content apart" with tags for genres, characterisations, etc. This data was first used to improve Netflix's recommendations metrics, but has since been applied to the original content. For instance, House of Cards is a dark, political thriller with charming yet immoral characters, while Orange is the New Black is a comedy-drama with strong female leads. Each are specific yet popular genres, meaning the shows had a built in audience.

Netflix is also not afraid to take risks. Back in 2013, when Netflix was developing all these new shows, the most successful film franchise was Marvel’s Cinematic Universe (MCU), with Avengers Asssemble its crown jewel. Meanwhile, the dark and gritty Arrow was leading the ratings on the CW. Combining these two successes into a single model made perfect sense, and lead to the deal between Marvel and Netflix to develop not one, but five original series.

Like the MCU and Avengers Assemble, each of the first four series will focus on a single character then see them join forces in a Defenders mini-series. This kind of deal was completely unprecedented, and amounted to essentially ordering five shows direct to series. A bold move, but Daredevil’s early success seems to validate it.

Netflix is borrowing from their competitor's models as well. Hulu’s USP has always been that it’s the best way to catch up on current shows. Similarly, Amazon Prime offered episodes of the CBS hit Extant the day after they aired on the network, making them available to international subscribers who would not have been able to watch the show live. Not one to be outdone, Netflix was able to get the rights to stream the final season of Breaking Bad while it was airing, with new episodes added each week.

This was easily the most anticipated TV show of the time, not to mention one of the most popular, and gaining exclusive streaming rights was quite the coup. Netflix is continuing this model with Breaking Bad’s spin-off, Better Call Saul, as well as this season of ABC’s hit Once Upon a Time, which features characters from Disney’s Frozen, the most popular Disney animated film ever.

While it is hardly the only factor that has led to Netflix's success, its original content is certainly one of the main reasons it has stayed ahead of the competition.

Neither Amazon Prime nor Hulu have been able to create content of the same quality nor quantity as Netflix. However, whether Netflix will stay on top is unclear, as its competitors may learn from Netflix's success and use its model against it in the future.