Netflix pays $100 million for another year of Friends – it’s probably money well spent
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Netflix pays $100 million for another year of Friends – it’s probably money well spent

Friends might be the most popular sitcom ever made – but when streaming video on demand (SVOD) market leader Netflix ponied up a cool $100 million for rights to stream it for another year, observers wondered if it had paid over the odds. Given how many episodes were made, its resurgent popularity with Millennials and younger who didn’t catch it the first time round, and its new lease of life on social media, the answer is: Netflix probably still got a great deal.

Even after the market penalised FAANG stocks in the latter part of the year, Netflix’s share price is up by 40%

graph 10 netflix

Source: Yahoo Finance

There are 236 episodes of Friends overall – more than enough to keep any binge-watcher busy for weeks on end. Add to that the fact that Friends is still massively popular, and that’s a lot of hours streaming that Netflix could get in exchange for its $100 million. According to the New York Magazine, Friends might still have been the most popular show on TV as late as 2016. And today, audiences have the power of social media behind them, letting them share Friends moments online in a way that previous viewers couldn’t. It might seem strange that Friends pre-dates social media, particularly given how many of the show’s jokes seem to be made for that type of sharing. But think back: Ross never panicked about an unfortunate Facebook status.

Friends is a proven crowd-winner, with fresh audiences that are flocking to it. It can stream in all of Netflix’s 192 markets, and it’s incredibly well-designed (if accidentally) for social media. Perhaps best of all, it’s relatively cheap against Netflix’s own programming. The company paid $200 million for 20 episodes of House of Cards. With Friends, even though it’s not original or exclusive content, they get more-than twice as much for half the price.

The decision to keep Friends was actually motivated by the online panic amongst Millennial fans of the show when press reported Netflix might not renew the deal. Netflix responded in fitting fashion: “The Holiday Armadillo has granted your wish: ‘Friends’ will still be there for you in the US throughout 2019.”

Disclosure

Dominion holds Netflix in its Global Trends Ecommerce Fund.


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