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Why streamers are shrinking their content libraries

Every day the streaming landscape is looking more and more like the beast it sought to slay — cable.

Looming talks of platform bundles come as major streamers push ad-supported plans, limit password sharing and lean into live sports coverage. The goal of exponential subscriber growth, fueled by pandemic lockdowns, has shifted. Wall Street wants profits.

The key to that may be depth, not breadth.

Last year many streaming services began shrinking their once-robust content libraries in order to pay smaller licensing fees. (Streamers must pay to license even their own film and TV shows, like when NBC forked over $500 million to buy back the rights to "The Office," an NBC show, in 2019.)

In the face of profit pressures and growing competition for viewers, streamers have taken to removing content to avoid the residual payments and licensing fees. That dynamic has split the major streaming companies into two camps: buyers and sellers.

On one side is Netflix, Amazon and Apple — companies that agnostically license content from other studios to bolster their streaming libraries. Then there's Disney, Universal, Warner Bros. Discovery and Paramount, which rely on decades worth of legacy content to build out their own services and also generate capital by auctioning it off to the highest bidder.

"The brands that are acquiring those titles are thinking about how to operate more cost effectively by not creating things but by buying licenses," said Stephanie Fried, chief marketing officer at Fandom, the world's largest platform for entertainment fans.

The sellers get cash, while the buyers get content that has a track record of reliability and consumer value. That's especially important for Netflix, which is a newer entrant in Hollywood, and