Should Netflix Go Shopping?

Few people dispute Netflix’s status as the biggest streamer on the block, with more than 200 million subscribers worldwide, deep pockets for A-list talent, and a general willingness to throw billions of dollars at the content wall and see what sticks. But as massive competitors increasingly steal market share, Netflix’s dominance is increasingly under threat.

Whether we look at Amazon’s play for MGM or the WarnerMedia-Discovery Inc. deal, the streaming wars have entered a critical period in which the best intellectual property is going to the bold few that snap them up before they’re gone. Even Peacock owner Comcast NBCU’s tire-kicking of Roku could change the streaming balance of power in ways that are hard to predict.

Until now, Netflix has used organic growth to fuel its largess, but its recent loss of market share to growing players like Disney+ could soon force the streamer to join the dating scene. Lucky for Netflix, plenty of eligible suitors are leaning against the gymnasium wall waiting for someone to ask them to dance. To be sure, Netflix’s $236 billion market cap and billions in cash on hand gives it plenty of options. But it all depends on how the streamer wants to look at the world.

Consider, for example, that Netflix produces fewer shows in the Horror genre than other categories such as Drama or Comedy. But its horror series garner a strong 1.90 ratio of upvotes to downvotes despite the Ranker audience’s high affinity (and therefore discerning tastes) in the genre.

Netflix’s horror ratio also beats out every major streamer (although HBO Max is a close second at 1.89). In devising these scores, we looked at overall sentiment across shows and then aggregated them by genre to create a specific up/down ratio. For context, a 1.0 score would mean an equal number of upvotes and downvotes in that genre. Anything above that shows a positive trend; anything below shows a negative trend.

So with all of that in mind, a relatively easy way for Netflix to double down on horror fans might involve looking at independent horror studio Blumhouse, whose IP includes movies like Paranormal Activity, The Purge, Us, Happy Death Day, The Invisible Man, Get Out, and many more. Imagine what Netflix could do with those properties in terms of series and spinoffs, especially considering Blumhouse’s recent forays into serialized storytelling in TV.

Another target could be Lionsgate, which owns the globally recognized Saw horror franchise, as well as other recognizable horror IP like Cube, The Texas Chainsaw Massacre, and Rob Zombie’s twisted House of 1,000 Corpses. In the US alone, the original Saw movie polls at more than 80% positive sentiment in every region of the country, according to Ranker Insights, and ranks #26 out of 731 horror movies on our Best Horror Movies Of All Time list, with its many sequels also placing highly. Meanwhile, the main Saw villain, Jigsaw, ranks #1 on our list of Fictional Characters People Never, Ever Want To Meet In Real Life and #26 on our list of the Greatest Movie Villains Of All Time across ALL genres.

As a bonus, Lionsgate could also bolster other genres where Netflix is strong, such as action and adventure, where average Watchworthy sentiment on Netflix shows a nearly 2-to-1 ratio of positive to negative. Lionsgate would bring big action franchises like John Wick and Rambo, along with more YA-tinged thrillers like The Hunger Games and Divergent. Again, imagine the streaming spinoffs and reboots that could proliferate (and that’s exactly what Amazon hopes to do with the James Bond franchise jointly controlled by MGM and creator Albert R. Broccoli’s heirs). Lionsgate also owns the Starz premium cable network, which Netflix could turn around and sell to a more traditional TV studio or network to recover some portion of the original acquisition cost.

Of course, Netflix could also use M&A to shore up weaker areas. According to our Ranker genre data gleaned from more than 1,700 voter lists, Netflix’s hundreds of comedy series get positive marks but still rank far below Horror, Mystery, Sci Fi & Fantasy, and others. Netflix’s 1.55 ratio in its comedy rankings are slightly below most of its streaming competitors, with some like NBCU’s Peacock and traditional cable network Comedy Central edging it out with 1.71 and 1.73 ratios, respectively. 

That means Netflix could easily use its deep pockets to break away from a pack that’s running pretty evenly at the moment. 

For example, Netflix could buy Funny Or Die, with its deep well of relationships in the comedy space driven by founders Will Ferrell and Adam McKay. Or it could even absorb a big comedy brand like The Onion, although it would need to pry it away from owner G/O Media, a holding company that also owns Gizmodo, The A.V. Club and other properties Netflix probably wouldn’t know what to do with. The more obvious tact might be to just go big, grabbing some comedy IP and a whole lot of other goodies at the same time. A play for ViacomCBS (which happens to own Comedy Central) could be enticing.

Even though some of ViacomCBS’s biggest comedies like The Big Bang Theory are controlled by Warner Bros. Television and wrapped up in the Discovery-WarnerMedia deal, Netflix could still pluck off tons of comedy IP from various ViacomCBS properties such as Comedy Central, BET Networks, and Showtime. And while Ranker and Watchworthy data suggests big positive sentiment for animation sub-genre anime (3.47 and 3.38, respectively), Netflix’s overall animation scores could use a boost.

Conversely, Ranker data suggests Comedy Central’s animation scores are high, owing much to South Park, one of the longest running and most successful animated comedies of all time. Would owning South Park give Netflix a twofer in both comedy and animation? Yes, although once again, its foil is HBO Max, which last year wrestled the entire South Park library away from Hulu. Netflix would need to wait a few years before it could take it back. But the long-term implications are huge.

It’s important to note that ViacomCBS includes Paramount, which owns some major IP including Star Trek, Mission: Impossible, Indiana Jones, Transformers, Teenage Mutant Ninja Turtles, and many others. Netflix would not only be able to exploit all of them on its streaming platform, but also could eliminate a rival by folding the Paramount+ streaming service (formerly CBS All Access) into Netflix. Another advantage is Netflix could grab some nice Paramount horror franchises such as Scream, The Ring and Friday the 13th. And in terms of Netflix’s need to hone its comedy chops, Paramount+ tracks especially well in comedy, its largest genre pool, with Watchworthy data showing a sky-high 5.5 average sentiment in the genre within Paramount+/CBS All Access.

Netflix could also look at smaller independent cable network groups. A&E Television Networks would be problematic because it’s a joint venture between Disney and Hearst Communications. But AMC Networks is an easier target that includes comedy-saturated IFC (Brockmire, Portlandia, etc.) as well as AMC and its critically acclaimed drama library that includes Mad Men, Breaking Bad, Better Call Saul, and of course drama/horror phenom The Walking Dead. And fittingly, AMC Networks also owns Shudder, a horror-themed cable channel whose infrastructure could further bolster Netflix’s horror portfolio. Meanwhile, BBC America, which swept last year’s awards season with Phoebe Waller-Bridge’s hit comedies Fleabag and Killing Eve, could also boost Netflix’s comedy prospects.  

In the end, Netflix has plenty of options—or it could simply reject the M&A bonanza altogether and continue its strategy of mostly developing its own IP (“Stranger Things” is no slouch) to avoid the feeding frenzy gripping the rest of the streaming world. Netflix has never followed the crowd. But then again, there’s a first time for everything.

These stories are crafted using Ranker Insights, which takes over one billion votes cast on Ranker.com and converts them into actionable psychographics about pop culture fans across the world. To learn more about how our Ranker Insights can be customized to serve your business needs, visit insights.ranker.com, or email us at insights@ranker.com.

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