At the UBS Global Media and Communications Conference in New York City, Netflix CEO Ted Sarandos (NFLX) commented on the state of the business, claiming the company will be making less original content and focus more on licensing, saying "what has happened is that the availability to license has opened up a lot more.” Yahoo Finance Reporter Alexandra Canal joins the Live show to discuss the streaming giants shift in focus and give insight into what it could mean going forward.

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Video Transcript

- Netflix is getting back to basics, focusing more on licensing content rather than creating its own. At the UBS Media Conference in New York, Netflix CEO Ted Sarandos noting that the licensing availability has opened up, quote, a lot more as traditional media companies focus on profitability. And Netflix is ready to step in. With more on what this means for the streaming space, we're joined by Yahoo Finance's Alexandra Canal. Hey, Allie.

ALEXANDRA CANAL: Hi, Rachelle. And yes, licensing is something we didn't see a ton of even five years ago as these streaming services and media companies really worked to make sure they had exclusive content on their platform. But recently, that's certainly changed as debt levels rise. Interest rates are high. Content spending has ballooned. And across the board, a lot of these media companies are pulling back on some of that content spending. But at the same time, they still want to make sure that they have as much content as possible on their platform, so that they can both reduce churn while also making sure they're continuing to add subscribers.

And that's where licensing has come in. Netflix has done this very well if you take a look at some of the shows that they license. Suits, for example, comes to mind. This is something that Ted Sarandos mentioned several times during that conference yesterday. Suits was a USA Network show that went on to Peacock and Amazon before landing on Netflix. And once it did, it absolutely exploded. It was a top show for this platform several months in a row. It generated really strong word of mouth and really showed how powerful licensing can be.

Sarandos said during that conference that licensing to US has the added benefit of enhancing IP plus revenue, and we should win the jump balls. In that sense, he's referring to the fact that because of Netflix's search and discovery, because of the fans and viewers on Netflix, when you license a show, it's likely that show is going to perform very well.

And it's also worth mentioning that this is not just a Netflix story. Warner Bros Discovery CEO David Zaslav. Same with NBC Universal. They've heavily been licensing and have talked about the benefits of licensing moving forward. So that's something to watch as the streaming wars continue to evolve.

But outside of licensing, Netflix said that they are focused on other areas of content creation as well. In particular, Unscripted has done really well for Netflix, like the Beckham documentary. But there are still areas of untapped potential. So Ted Sarandos said local language Unscripted is something that the streamer could do more on, in addition to animation. He said out of the top 10 movies, most streamed movies, eight of them were animated titles. So that's something that they want to work on as well. So expect some other areas of growth on the content side as the year moves on, and we head into 2024.