Image: Bullet Train, Sony
Sony has built a reputation as a content arms dealer, licensing its valuable content to other players like Netflix and Disney who use it to bolster their own platforms. The company has benefitted from staying out of the fray of the streaming wars, allowing it to cash in on heated competition without incurring the hefty expenses of launching its own streaming platform to compete directly. Sony’s lucrative pay 1 deal with Netflix is a good example of how even the leading platform is happy to strike a deal for Sony’s content. Despite the company’s high profile deals with Netflix and Disney, Sony produced content is spread across major streamers in the US and in most cases it punches above its weight on these platforms, making up a greater share of demand than its share of titles.
Apple TV+ is usually focused on original content but recently has experimented with adding licensed classic movies to its catalog. The impact of Sony content in the platform’s most recent addition of classic titles in March is apparent with Sony titles like “Spider-Man” and “Men in Black” accounting for about 6% of movies on Apple TV+ and nearly 12% of demand.
A decent portion (3-5%) of the movie catalogs of Hulu and Netflix, both of which are significantly larger than Apple TV+, consists of Sony films. However, when we consider the demand for these movies, the value of Sony content to these platforms is more clear. 11% of demand for movies on Hulu and 10% of the demand for movies on Netflix was driven by Sony produced titles. On Netflix, titles from the Spider-Man franchise and “Bullet Train” ranked among the most in-demand Sony films. On Hulu, the original “Ghostbusters” received a boost in demand from the latest addition to the franchise “Ghostbusters: Frozen Empire.”
It isn’t just movies either. Sony-produced series also punch above their weight on these streamers, making up a larger share of demand for shows than their share of catalog. Netflix stands out as having some of the strongest performing Sony series on its platform - both licensed series like “Better Call Saul” or “Outlander” and Netflix originals like “Cobra Kai.”
Paramount, now the target of an acquisition offer by Sony, could probably have been successful by sticking to the role of content arms dealer for other platforms like Sony has. Instead, it tried to balance the financial appeal of licensing hugely successful content to other platforms (think “NCIS” on Netflix or “Yellowstone” on Peacock) with efforts to make its own platforms competitive. The cost of this strategy has put the company in the precarious financial situation it is now as it considers offers from potential buyers.
The industry appears to be entering a period of consolidation. Netflix has solidified its dominance for the past few quarters. The recent news of a cross company Disney+/Hulu/Max bundle will create another behemoth and put pressure on other platforms to follow suit to stay competitive. Reports have suggested Sony’s plans for a Paramount buyout include keeping Paramount’s studio operations and IP assets but selling off the company’s linear channels as well as Paramount+. This would be in line with Sony’s existing strategy of staying out of the direct-to-consumer streaming business which has served it well so far.
