Sony is First Big Studio to Ink Production Deal with Netflix

Sony Pictures Television has inked a deal to produce a psychological thriller for Netflix. From the creators of the FX legal drama “Damages,” the series is slated to begin production early next year. It marks the first time a major Hollywood studio will produce a program for the streaming video service. Following in the footsteps of cable networks such as HBO and AMC, Netflix is aggressively pursuing original content. The success of its Emmy-winning “House of Cards” could help pave the way.

“Netflix already has earned respect in Hollywood for some of its shows, including the Emmy-winning political drama ‘House of Cards’ and prison comedy ‘Orange is the New Black,'” reports The Wall Street Journal. “Neither was produced by a major studio, however. ‘House of Cards’ was produced by Media Rights Capital, an independent firm, while ‘Orange is the New Black’ was produced by Lions Gate Entertainment Corp.”

“The media conglomerates that control many of the big studios are still sorting out whether Netflix is friend or foe: It is a major licensee of their library programming but also a competitive threat to channels that air their content. Since Sony doesn’t own U.S. cable or broadcast networks that compete with Netflix for viewers, it has more flexibility to experiment.”

“We’re willing to do different things and bet on the future,” said Steve Mosko, president of Sony Pictures Television. “We’re pumped up — it’s a challenge to show a major studio can be in business with one of these services.”

The big question is whether Hollywood studios can make the same money producing for streaming services as they do for TV networks. Traditionally, profits are the result of licensing, in addition to international distribution, home video sales, re-run airings, etc. It is not clear if studios will see the same return regarding international and back-end markets for Netflix originals.

“In the Sony deal, Netflix will get the rights to premiere the one-hour drama in all international territories where it offers service,” notes WSJ. “Mosko said Sony earlier handled international sales for ‘House of Cards’ and saw significant demand for the show overseas, giving the studio greater confidence.”