Audience demand for Netflix originals will soon pass demand for licensed TV shows and movies, and that's great news for the streaming giant as competition heats up

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"The Haunting of Hill House"

• Audience demand for Netflix Originals will surpass that of licensed titles by October 2019, according to a new report from research firms Parrot Analytics and S&P Global Market Intelligence.
• Original content is essential as more companies like Disney and AT&T enter the streaming war.

Netflix had an ambitious goal in 2018 to release 1,000 original TV shows and movies by year's end. The investment is expected to pay off as more and more companies enter the streaming war, and exclusive content becomes not only important, but necessary.

A report from research firms Parrot Analytics and S&P Global Market Intelligence released on Thursday said that audience demand for Netflix Originals will surpass that of licensed titles by October 2019.

Parrot Analytics

That's good news for the streaming giant, as licensed titles will be harder to come by in the future.

Disney is ending its high-profile licensing deal with Netflix at the end of this year. It will release new content going forward to its upcoming streaming service, Disney+, starting with March's "Captain Marvel."

Disney+ could already be affecting Netflix's library. Netflix has canceled three of its Marvel shows recently (Disney owns Marvel Entertainment): "Luke Cage," "Iron Fist," and "Daredevil." While social-media data showed that interest in the shows had dropped dramatically over time, it's also likely that Disney would want to limit competition.

FX's "Sons of Anarchy" was also pulled from Netflix this month. The Fox-owned series could be a casualty of the Disney-Fox merger, which is expected to close in early 2019, and it's likely that other Fox properties will be removed from Netflix eventually.

READ MORE: As 'exclusives' become the priority for Netflix, Hulu, and Amazon, these charts show how many TV shows and movies they still share

"The future for the industry is likely to be even more crowded and the winners are still unknown," said S&P research director Deana Myers in the report. "Walt Disney is expected to debut its SVOD service in 2019 and its proposed buy of the studio and libraries of 21st Century Fox will add a vast amount of content to this service. Other anticipated SVOD launches include those by Apple and Warner Media. We estimate the overall US SVOD industry has many strong years of growth in its future, particularly as competition from Disney and Apple could impact the market."

AT&T, which bought Time Warner this year to form WarnerMedia, has also caused problems for Netflix recently. The internet exploded earlier this month when the Netflix show page for Warner Bros.' 1990s hit sitcom "Friends" said the show would be leaving in January.

Netflix removed the note soon after, and confirmed that "Friends" would remain on the service in 2019. AT&T CEO Randall Stephenson confirmed that AT&T and Netflix were finalizing a multi-year agreement to keep "Friends" on Netflix while giving AT&T the option to include it on its own service. According to The New York Times, Netflix will pay up to $100 million for the show, more than the $30 million it was paying per year before.

That's a steep price tage and highlights how essential original content will be for Netflix when Disney, AT&T, and more companies launch their own services.

Licensed shows still accounted for 63% of viewing in the US in October, but streaming of originals increased 24% compared to that time last year, according to 7Park Data. In November, six of the ten most-streamed shows on Netflix were originals.