Netflix's push into franchise TV will be essential as Disney Plus prepares a barrage of Marvel and 'Star Wars' shows

• Netflix recently introduced new teams to help it build bigger franchises: a franchise-TV division and an event/spectacle-TV division.
• Franchises will be essential for Netflix as Disney Plus looks to release at least 10 new "Star Wars" and 10 new Marvel TV shows in the next few years.
• Data from Parrot Analytics shows Disney's "WandaVision" is already a hit.

Netflix announced in its earnings report this week that it had reached a pivotal milestone in its streaming dominance, passing 200 million subscribers worldwide.

The next phase of Netflix will reflect its global reach. The streaming giant has plans to build on event-sized and franchise-launching TV to compete with traditional Hollywood movie studios.

When asked during an interview with The Hollywood Reporter in September what Netflix could learn from Hollywood, the company's co-CEO Reed Hastings said that movie studios "create great franchises."

"We're making great progress on that with 'Stranger Things' and other properties, but compared to 'Harry Potter' and 'Star Wars,' we've got a long way to go," Hastings said.

Netflix has already planted seeds with the aforementioned "Stranger Things"; the hit fantasy series "The Witcher," which Netflix has already ordered a prequel to called "The Witcher: Blood Origin"; an upcoming "Resident Evil" show based on the video-game series; and the upcoming "Three-Body Problem," based on the sci-fi book series and developed by the former "Game of Thrones" showrunners David Benioff and D.B. Weiss.

To help get these projects off the ground, Netflix recently introduced two new teams: the franchise-TV division led by Netflix's VP of international originals Kelly Luegenbiehl and the event/spectacle-TV division led by VP of original drama series Peter Friedlander.

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According to a person familiar with Netflix's strategy, the franchise-TV team focuses on properties that could launch spin-offs, sequels, and more (like "The Witcher"), while the event/spectacle-TV team includes more contained TV that would attract a large audience (like "The Queen's Gambit").

What separates Netflix from its traditional Hollywood counterparts that have jumped into the streaming game, like Disney and WarnerMedia, is that Netflix doesn't have decades-old IP to build on. It's starting from scratch by snatching up properties with franchise or event potential, another source close to Netflix said.

Disney Plus has 'Star Wars' and Marvel

The strategy will be essential for Netflix's future as it competes against Hollywood titans looking to build their streaming services - particularly Disney Plus, which has amassed nearly 90 million subscribers since launching in November 2019. Disney is preparing to ramp up development on at least 10 Marvel Cinematic Universe TV shows and 10 "Star Wars" shows, as announced during a recent Disney investor day.

In other words, Disney's biggest theatrical franchises are looking to dominate streaming, too.

Disney Plus' latest original series, Marvel's "WandaVision," debuted on Friday and is already a hit. The show broke into research company Parrot Analytics' top 10 most "in-demand" original streaming shows in the US this week, which measures a show's viewership, engagement, and desire weighted by importance. It was the sixth most in-demand TV series in the world by Sunday.

The good news for Netflix is that "Cobra Kai," which it inherited from YouTube for its third season that debuted this month, is the No.1 most in-demand streaming original in the US right now. But as Disney Plus releases more episodes of "WandaVision" in the coming weeks, its audience demand could grow. And Disney's "Mandalorian" and "Star Wars: The Clone Wars" sat at No. 2 and No. 4 this week, respectively.

It shows the power of Disney's biggest franchises to eat into Netflix's demand share and why those new divisions are so important to Netflix. As Hastings said, Netflix wants to build franchises like that. It wants its own "Star Wars" and Marvel.

Hastings isn't shy about acknowledging Disney's streaming success, either. During this week's earning call, the co-CEO said that it's "super impressive what Disney has done."

"It is going to be great for the world that Disney and Netflix are competing show by show, movie by movie," Hastings said. "And we're very fired up about catching them in family animation, maybe eventually passing them, we'll see."

That's not the first time Hastings has said he wants to catch up to Disney in animation. During that September THR interview, he said that Netflix wants to "to beat Disney in family animation" but it will "take a while," similar to his comments about franchise building.

Netflix and Disney Plus have been locked in this struggle over consumer attention since Disney Plus' launch, when the first seasons of "The Mandalorian" and "The Witcher" duked it out for audience demand week-to-week. But as both streaming services continue to grow and develop their respective spectacle TV series, the competitiveness between them may have even bigger repercussions for the rest of the streaming space.

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