Blast From The Past: In search of cash, studios send old shows back to Netflix
Confronting sizable debt burdens and the fact that most streaming services still don’t make money, studios like Disney and Warner Bros. Discovery have begun to soften their do-not-sell-to-Netflix stances.
• JOHN KOBLIN, NICOLE SPERLING
NEW YORK: For years, entertainment company executives happily licensed classic movies and television shows to Netflix. Both sides enjoyed the spoils: Netflix received popular content like “Friends” and Disney’s “Moana,” which satisfied its ever-growing subscriber base, and it sent bags of cash back to the companies.
But around five years ago, executives realized they were “selling nuclear weapons technology” to a powerful rival, as Disney’s chief executive, Robert A. Iger, put it. Studios needed those same beloved movies and shows for the streaming services they were building from scratch, and fuelling Netflix’s rise was only hurting them. The content spigots were, in large part, turned off. Then the harsh realities of streaming began to emerge.
Confronting sizable debt burdens and the fact that most streaming services still don’t make money, studios like Disney and Warner Bros. Discovery have begun to soften their do-not-sell-to-Netflix stances. The companies are still holding back their most popular content — movies from the Disney-owned Star Wars and Marvel universes and blockbuster original series like HBO’s “Game of Thrones” aren’t going anywhere — but dozens of other films like “Dune” and “Prometheus” and series like “Young Sheldon” are being sent to the streaming behemoth in return for much-needed cash. And Netflix is once again benefiting.
Ted Sarandos, one of Netflix’s co-chief executives, said at an investor conference last week that the “availability to license has opened up a lot more than it was in the past,” arguing that the studios’ earlier decision to hold back content was “unnatural.” “They’ve always built the studios to license,” he said.
As David Decker, the content sales president for Warner Bros. Discovery, said: “Licensing is becoming in vogue again. It never went away, but there’s more of a willingness to license things again. It generates money, and it gets content viewed and seen.” In the coming months, Disney will start sending a number of shows from its catalog to Netflix, including “This Is Us,” “How I Met Your Mother,” “Prison Break” and several editions of ESPN’s sports documentary series “30 for 30.” “White Collar,” a Disney-owned show that used to be part of the same lineup as “Suits” on the USA Network, will also join the service. (Old episodes of “Suits” have been one of Netflix’s biggest hits this year.) The popular 2000s-era ABC hit “Lost,” which left Netflix in 2018, is also returning next year.
Jeremy Zimmer, the chief executive of the United Talent Agency, said the studios’ about face was a “financial necessity.” “They said, ‘Wow, in order for us to compete in streaming, it’s costing us billions to create new content to drive subscriptions,’” Mr. Zimmer said. “‘Where are we going to find the money? Oh! We have this stuff that’s been sitting here. We can sell that.’ It’s a very logical progression.”
Acknowledging the motivation, Dan Cohen, the chief content licensing officer for Paramount, said one of the biggest advantages to licensing for traditional media companies was that “the margins tend to be high.” Movies and series from other studios have long provided a vital backbone to Netflix, allowing executives to populate the service with established favourites to complement its original series like “The Crown,” “Wednesday” and “The Diplomat.” The company said on Tuesday that from January to June, 45 percent of all viewing on the service came from licensed shows and movies.
