New Programming Deal Highlights Netflix’s Leverage

Imagine you are in charge of a major TV network.

Now, suppose you decide to license some of your TV shows to Netflix. What happens next?

The initial outcome is straightforward: you receive a substantial amount of money, nearly all of which is pure profit. You’ve already covered production costs and likely earned from them, and now Netflix is paying you again. Fantastic, right?

The subsequent effects, however, are debatable.

One scenario is that Netflix viewers watch your shows, realize they originated from your network, and eventually seek more of your programming directly from your network. This was the case when Netflix started airing older episodes of AMC’s “Breaking Bad” while new episodes were still being broadcast on AMC. The ratings for “Breaking Bad” soared during this period, benefiting the network in the long run.

Another possible outcome is that Netflix viewers watch your shows but have no idea they came from your network, leading them to believe they’re just Netflix shows. This perception harms the long-term health of your network because viewers are less likely to associate the content with your brand.

This dual possibility is a key reason big media companies have had a sporadic approach to licensing content to Netflix. Initially, as Netflix was establishing its streaming service, media companies were happy to make these deals, thinking Netflix was getting the short end of the stick. Later, realizing Netflix was a formidable competitor, many pulled their content to host it on their own streaming platforms. Now, some have resumed selling their high-quality content to Netflix because they need the revenue.

This brings us to a new licensing arrangement between AMC and Netflix. Alongside established shows like “Breaking Bad” and “The Walking Dead,” AMC is now also licensing the streaming rights to less-known shows such as “Anne Rice’s Interview with the Vampire” and “Monsieur Spade.” This part isn’t out of the ordinary.

What’s new is that Netflix has agreed to categorize all AMC shows into a “collection.” In theory, this means a “Better Call Saul” fan might realize it’s an AMC show and discover that AMC also offers shows like “Gangs of London,” the first two seasons of which are also available on Netflix.

AMC is enthusiastic about this arrangement, as highlighted in its summer earnings call. They described it as an “innovative deal to strategically curate and window prior seasons of 15 AMC branded shows” on Netflix.

I keep a close eye on Netflix and have rarely seen it emphasize the network or studio origin of its content unless it’s promoting something as a “Netflix Original,” sometimes misleadingly so. The desire for network attribution has long been a point of contention with TV and movie producers.

Curiously, despite knowing about the new AMC collection, I found it hard to locate on Netflix. There was no indication of an AMC collection on my Netflix home screen, whether viewed on my phone or TV, despite Netflix being aware that I’ve previously watched many AMC shows like “Breaking Bad.”

Eventually, I searched for “AMC” in the Netflix search bar and found the collection page, a curated compilation of AMC shows.

However, it’s unlikely many users would think to type “AMC” into the search bar. Hence, it makes one wonder if Netflix will eventually feature the AMC collection on its main homepage, labeled under categories like “Blockbuster Movies” or more specific tags based on user activity. At least for some users.

Given that I’m a frequent viewer of AMC shows, one would expect this to appear for me already. Allocating a spot for AMC is one thing; making it easily accessible is another.

A representative for Netflix declined to comment.

For now, until there’s more clarity, it’s hard to imagine Netflix dedicating significant screen space to a single provider, even if it involves popular shows like “Breaking Bad.” Netflix holds the upper hand in its dealings with TV networks, making it unlikely to offer substantial concessions.

*Yes, it’s a stressful job! In a declining industry! But the pay is substantial.

Source: Business Insider