Netflix (NSDQ: NFLX) will attempt to outbid HBO for streaming rights to the movies the pay-TV giant gets from its current output deal with Warner Bros. (NYSE: TWX) the streaming service’s chief content officer, Ted Sarandos. “We will be an aggressive bidder for that programming,” he said in a Q&A on Tuesday at the National Association of Television Programming Executives conference in Miami.
Sarandos disclosed his bidding strategy in answer to a question about Netflix’s increasingly acrimonious rivalry with HBO and the CEO of its parent company, Jeff Bewkes of Time Warner. Addressing the public war of words between the two companies, Sarandos lavished praise on Bewkes’ business acumen but explained that the true motivation behind the tension was Netflix’s intent to bid up the cost of content that would otherwise have a smoother path from Warner Bros., which Time Warner also owns, to HBO.
HBO’s current output deal with Warner Bros. expires in 2014, but negotiations will likely begin years before that.
“That’s why I think there’s some aggravation and there’s nothing more to it than that,” Sarandos told interviewer Will Richmond of Videonuze.
Sarandos also delved into the complexities of the HBO-Netflix relationship because in addition to being current competitors, there’s also plenty of untapped potential for HBO to be selling streaming rights to its original series to Netflix. “They’re a great seller and with us being a great buyer, ultimately we’ll get to a place where we can do business on their content,” he said.
But Sarandos added that HBO and Netflix aren’t truly competitors in the long term because he believes HBO’s business is really more centered on original programming. The more HBO spends in that category, the output movies “is a vaccuum we can come and pick up.”