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Netflix is finally planning to own its original shows, not just license them

While Netflix may be known for its original series House of Cards and Orange is the New Black, the on-demand streaming video juggernaut doesn’t own these series. Yet.

In a recent Bloomberg Business report, Netflix CEO Reed Hastings said the service will prioritize ownership of its original content. It’s the next logistical step for the service that will launch 20 original series per year beginning this year.

“We’ve continued to expand our creative role on the shows,” said Hastings to Bloomberg Business. “Now we’re taking on ownership and production.”

In the past, Netflix has only licensed programs from studios. For instance, producer Media Rights Capital (Babel, Ted, Bruno) owns the rights to House of Cards. Lionsgate TV (Mad Men, Weeds), the producer of Orange is the New Black, owns the rights to the show along with Tilted Productions.

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Owning rather than licensing a TV series gives Netflix exclusive rights to the show. Currently, as Bloomberg notes, House of Cards can also be bought on Amazon.com and seen on Sky Deutschland in Germany. In theory, Media Rights Capital could even sell the exclusive rights of House of Cards to a different, higher-bidding distributor. According to the Bloomberg report, Neflix currently only pays about half of what it normally would to produce a show when it licenses original content.

As Netflix broadens its goals as a streaming video platform and develops more original content, content ownership will be key. While ownership comes with a cost, it can lead to additional revenue streams from DVD sales and licensing rights. For the rapidly growing company, which has signed up 4.9 million subscribers so far this year, it only makes sense for them to further invest in its shows.

The Bloomberg report mentions Flaked, starring Will Arnett, as the first confirmed upcoming Netflix original series that the service plans to own.