Cable Networks and Netflix Face Off Over Streaming Rights

Two of cable’s biggest programming networks, FX and Turner, have decided they want to stream all of their series’ episodes within a current season online. It’s a challenge to the industry standard, which generally allows networks to stream only the five most recent episodes online. But if this were to change, Netflix would get away with paying significantly lower rates for any show streamed elsewhere — and studios aren’t too happy about that possibility.

To achieve their goal, the programming giants are telling studios that they won’t buy a new show unless it comes with these rights. Part of why the networks are making this demand is that having only a few episodes available online lessens the chance of attracting new viewers late in a series’ first season, Vulture reports.

But Netflix is standing still on its position of shelling out less cash for nonexclusive series, as they don’t typically make streaming for an entire season until shortly before the next begins. Their stance on exclusivity complicates the issue further for studios, who could stand to lose millions of dollars in revenues.

An industry insider expressed to Vulture how many are feeling about FX and Turner’s new demands, saying, “Why would we do a show with them when we’re limiting our upside?” For shows like “Breaking Bad” that developed a stronger following over time thanks to Netflix, this seems to many like a step in the wrong direction for producers.

But another senior cable executive told the site that it’s about the future, particularly of networks’ ad revenue from streaming online, and about “finding a way to make the current system more viable as non-linear consumption becomes more and more important.” The hope is, down the line, these sources of revenue will increase. Besides, they only want to be able to stream the current season of a show before it heads to Netflix, not during.

Still, as Netflix execs have recently explained, that makes the shows less valuable to the company. They’re willing to take them, but at a deeply discounted rate. Which means someone will likely have to lose out.

“In the short term, all of the skirmishing among studios, networks, and Netflix probably won’t have a negative impact on viewers, and might even have an upside,” notes Vulture. “Viewers who don’t subscribe to Netflix or don’t want to wait until a series lands on the service may have more, and cheaper, viewing options to catch up.”

However, the negative for consumers could be a world in which advertisements are replaced by higher cable and broadband bills. Networks and studios could also attempt to weaken Netflix by distributing content on competing platforms such as Amazon or Hulu Plus.

“It’s also possible that all parties involved will come up with a way to make sense of TV’s brave new world, and traditional networks and streaming services such as Netflix will come to the conclusion they can coexist while still making millions and millions of dollars every year,” suggests the article.