The Obamas' Netflix deal and broader streaming strategies

Netflix has been aggressively producing its own original content in recent years in a bid to bypass the Hollywood studio monopoly, and to create a library of exclusive content that can be shown around the world.

Having recently acquired the rights for Martin Scorsese's next film starring Al Pacino and Robert De Niro, the streaming service now has an exclusive deal with Michelle and Barack Obama to create content that the latter said aims to "cultivate and curate the talented, inspiring, creative voices who are able to promote greater empathy and understanding between peoples" — a very different sounding approach to current US President Donald Trump, who shot to fame with his reality TV show The Apprentice in the 2000s.   

Amanda Lotz, media scholar and professor at the University of Michigan, told DW about how the deal is part of a revolutionary new content model that draws diverse global audiences.

DW: Netflix has just hit 125 million subscribers worldwide, with more than half based outside of the US. How is the streaming service rapidly becoming the world's biggest global content provider, and one that is outcompeting traditional TV broadcasters?

Amanda Lotz: One thing that is distinctive about Netflix is that it actually tries to target many different niches. We've had international TV for a long time, but haven't had the technology that has the kind of opportunities that Netflix has in terms of having a catalogue instead of a TV schedule, and in terms of making programming available simultaneously around the globe at the same time. That's really different.

So I think initially maybe Netflix thought that they'd be pushing most of their catalogue from the US abroad. But I think we've seen good evidence already that they are also committed to developing content in many of the other markets that they're in [for instance, the German-produced serie Dark - Editor's note].

By drawing from a global audience, those different niches they target don't have to be in one country, but in many countries. The TV business has been licensing to individual nations in a way that sets up national identity as being the most important part of what works in different places. What Netflix is able to do is break down those barriers and focus on different kinds of communities all around the globe, without conceiving of them as living in a specific place.

What does the Obama's exclusive new deal say about the Netflix's efforts to create its own exclusive content outside the traditional Hollywood movie and TV model?  

I think it falls in line with some of the other stories of the last months of exclusive deals made with Ryan Murphy and Shonda Rhimes [the highly successful producers were poached from major TV networks in seven figure deals, with Netflix have already bought the rights to stream Rhimes' series, Grey's Anatomy - Editor's note].

A service like Netflix is cultivating a library instead of a TV schedule, and is trying to keep all of its content just in the Netflix library – they're not trying to sell it off on the secondary market. Since that's the core part of the business model, exclusivity is a real advantage for them.

So big buzzy moves like this where there are public figure like the Obamas, and Netflix being the only place that you can go for that content, I think it's something that is both very good for Netflix expanding its brand and saying "we're gonna be more than series."

We don't know really what the Obamas will do, but I think what we see here is that Netflix is a service that is many different things. It's a great place to find access to a lot of documentaries that you may not be able to access in other places. There's an interest in this kind of programming and the kind of vision that the Obamas want to develop. But to have such a big name developing their exclusive catalogue is really important.

Will Netflix focus more on international content, including for example German Netflix series like Dark, to appeal to its growing global audience? Or will it continue to primarily produce its own content in the US for its biggest market?

I think it's important to recognize that it's not an either or. I think they'll do both. Looking at this from the perspective of the US, and the economics of a cable channel or broadcast network, for a long time the perception was that there wasn't a big enough market in the US for a lot of international content. But the Netflix distribution system allows for that market to be identified and serviced. Once Netflix pays to create that content, it's in its global library and they have greater rights and access to it and the ability to put in more markets.

So Netflix is taking advantage of the opportunity that the technology allows to both have these libraries that can be much deeper than a TV schedule could ever be, and to be in many places at the same time.

Can we expect the Netflix streaming model to eventually overpower the traditional broadcast model? Is that starting to happen already?

It's hard to know. The angle that a lot of press and analysts take is this expectation that it's a battle that only one can win. The way I see it is that the TV ecosystem is expanding and as long as broadcast is doing something different from what an entity like Netflix does, then it continues to stay alive.