Netflix (s NFLX) is in syndication talks for nearly every new show on TV, Netflix Chief Content Officer Ted Sarandos said Thursday at the Nomura U.S. Media Summit in New York City, and that has helped broadcasters and studios to prosper.
“All of the fears of what Netflix would do to television … haven’t been realized,” Sarandos said. Not only has the company spent hundreds of millions on content, but it has also driven people to watch current season episodes of shows, he argued.
Part of the success Netflix has had acquiring rights has to do with the fact that it has done traditional media deals from day one. The company wrote checks instead of promising studios rev-share deals, a practice that has shaped the industry to the point where revenue sharing isn’t even an option anymore. “That train has left the station,” Sarandos said.
Netflix has also helped to reshape the market for older TV content. “We have established that the season-after VOD rights are very valuable,” said Sarandos. And as studios realize that they can make money with catalog content, the prize of these catalogs is rising to a point where competing with Netflix becomes very costly. TV Everywhere offerings, for example, would have a hard time offering the same kind of catalog his company offers. “They would have to pay more than I would be willing to pay,” Sarandos said.
Still, there are deals that even Netflix is going to pass on. “We would have loved to have Modern Family,” explained Sarandos, but the VOD rights were sold as part of its syndication rights. Sarandos made the case that studios won’t win if they withhold these rights from the market. He cited the licensing arrangement for Glee, which gives Netflix the right to stream older seasons online and for Oxygen to show them on TV, as “a great deal for everybody.”
Another deal that got props from Sarandos is his company’s recent licensing agreement with Miramax. The studio licensed its catalog to Netflix on a non-exclusive basis, and has since licensed rights to Hulu as well. “It is better for all parties if we get multiple buyers,” because a non-exclusive deal would minimize the risk for buyers while maximizing profits for sellers.
In other words: It helps a company like Netflix to be frugal. That’s been Netflix’s key philosophy ever since it started to rent physical DVDs, according to Sarandos, who summed up his company’s media-buying philosophy with the words: “Have what you can afford.”