Making Netflix Deals: Does It Hurt Big Media Companies?

Large media companies like Viacom are seeing financial growth coming from digital devices, on which consumers are accessing streaming services such as Netflix. While this seems like a win for Viacom, as it collects on money paid by Netflix for the right to provide shows it has already aired on traditional TV, it might also backfire as more users become accustomed to watching online rather than on television.

Some will argue the contrary, noting that many binge-watchers on Netflix actually catch up on shows in time to then watch a new season in primetime, thus boosting traditional TV’s ratings again, creating a full-circle type of solution that benefits all.

“But Bernstein analyst Todd Juenger is convinced that, at least for kids’ programmers, and Viacom in particular, the Netflix deals are bad ones, because they train Netflix subscribers and their kids to watch the shows on the Internet instead of on TV,” reports AllThingsD.

There is data to back up Juenger’s claim. A chart included in the article post provides an outlook indicating that traditional TV programming performs better in homes that do not also have Netflix accounts.

“Note that the only case where a network did better in a non-Netflix household was Time Warner’s Cartoon Network, which didn’t have a syndication deal with Netflix until January 2013,” concludes the article.

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