Streaming platforms are pouring money into original content, but whether it pays off depends on two things: how much their content already overlaps with competitors and how flexible their pricing is. When prices are fixed (e.g., standard subscription tiers), platforms are more likely to invest in originals—especially if competitors offer similar libraries—because originals help differentiate. But when platforms can easily adjust prices, heavy content overlap actually reduces the incentive to invest in originals, since pricing can be used instead to compete. Notably, when pricing is flexible, original and licensed content can work together to benefit platforms, content producers, and consumers.
Practical takeaways:
* If your pricing is rigid, invest in original content to stand out in crowded markets.
* If you can adjust prices flexibly, don’t overinvest in originals in crowded markets; use pricing strategically instead.
* Treat original and licensed content as complementary (not competing) when pricing flexibility allows it.
Xuelian Qin, Assistant Professor, Business School, Central South University; Lin Tian
Professor, School of Management, Fudan University; Bobby Zhou
Associate Professor, Robert H. Smith School of Business