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Netflix dives into UK reality TV ahead of new competitors' arrivals

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Netflix dives into UK reality TV ahead of new competitors' arrivals

Netflix Inc. is counting on siblings seeking love and a computer-enhanced dance contest to help fend off new competition in the U.K.

The streamer has commissioned "Dated and Related," "Dance Monsters" and a third reality show called "Snowflake Mountain" as it steps up its tiny unscripted offering ahead of the introduction of rival on-demand services from ViacomCBS Inc. and Comcast Corp. The move is a departure from Netflix's usual focus on scripted dramas such as "The Crown" and "Stranger Things," and it may be a quick and cheap way of competing with the new reality-laden rivals.

"A big part of what's caused this investment in unscripted content is the avalanche of new streaming platforms," said Fred Black, an analyst at Ampere Analysis. Netflix "had to react and bump up their own reality slate," Black said.

The push into reality TV will also help Netflix bolster its catalog amid the danger of losing some its most popular shows to new streaming services backed by the programs' owners. It also marks a challenge to local free-to-air broadcasters ITV PLC and Channel Four Television Corp., for which reality TV shows, including "Love Island," are a rare bright spot, particularly among younger viewers.

"The shift towards more non-scripted content on Netflix and Amazon Prime Video is a direct entrance into a realm still dominated by linear TV channels," said Matt Ross, a product manager at Digital i, which tracks subscription video-on-demand ratings.

Just 3% of content on Netflix is reality, compared to over 20% on ITV's ad-supported video-on-demand service, ITVHub, and Channel 4 VOD service All4, according to data from Ampere Analysis and U.K. regulator Ofcom. For Discovery Inc. streaming service Discovery+, which launched in the U.K. in November 2020, the share is 36%.

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Netflix also commissioned a third season of "Too Hot to Handle," in which a group of strangers are sent to a luxury seaside resort and challenged not to engage in romance. The show, launching early in 2022, has been compared to ITV's dating series "Love Island," which was the most watched show on any digital channel in 2020.

The reality drive "could be a tipping point for someone to say ... I will get Netflix," said Richard Berndes, an analyst at Kagan, a media research group within S&P Global Market Intelligence. Shows such as "Love Island" are "one of the main reasons" younger viewers watch ITV, Berndes said.

Netflix and London-listed ITV declined to comment for this article. State-owned Channel 4 did not reply to a request for comment.

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The streaming giant's push into unscripted content also comes as it faces up to the potential threat of new U.K. streaming services reclaiming parts of its catalog. In the U.S., the company lost the rights to the perennially popular sitcom "Friends" after show owner Warner Media introduced a rival streaming service.

Content owned by AT&T Inc.-owned Warner Media, ViacomCBS Inc. and The Walt Disney Co.-owned NBCUniversal accounted for 43.17% of Netflix's most viewed shows in the U.K., France, Italy, Germany and Spain in the first quarter of 2021, according to TV ratings company Digital i.

Series owned by these companies are a "key driver for subscriber engagement on Netflix ... the key to the success of these shows is their 'rewatchability' and their sheer number of episodes," Digital i's Ross said.

Comcast's Peacock will come to the U.K. later this year, followed by Viacom's Paramount+ in 2022, as part of wider European launches. Warner Media will introduce its streaming service, HBO Max, in European countries, excluding the U.K., in October. The AT&T unit is in the process of merging with Discovery.

In the U.K., Peacock and Paramount+ content will be added to Comcast-owned Sky's subscription video-on-demand service, Now, where 11% of all content hours already come from reality TV, according to the Ampere Analysis data.

Comcast, ViacomCBS, WarnerMedia and Disney did not respond to requests for comment.

Still, whichever service a viewer picks, more reality TV shows seem unescapable given their popularity and low cost. Episodes are also quick and easy to make, another key consideration given ongoing COVID-19 concerns.

"Unscripted formats often deliver similar viewing figures to the big, scripted shows, but at a lot lower tariff and cost," said Lucas Green, Global Head of Content Operations at Banijay, a large TV and film production and distribution house. "And crucially, in a pandemic, they can be produced a lot faster."