Sunday, December 5, 2010

Netflix beefs up TV offerings ...

From the NYPost:

Netflix is making an aggressive play for in-season episodes of hit TV shows to expand its Web streaming service.

The company is in talks with studios about gaining access to current episodes of primetime shows and is willing to pay between $70,000 and $100,000 per episode, according to a person familiar with the matter. Netflix had no comment.

Netflix CEO Reed Hastings has made no secret of his desire to move beyond movie rentals and beef up TV offerings. While the company has added a number of shows, such as "Nip/Tuck," "Veronica Mars" and "The Family Guy, they are mostly episodes from previous seasons.

Just last month, Netflix won a groundbreaking deal with NBC Universal to stream comedy show "Saturday Night Live" the day after it airs on the broadcast network.

With Netflix ready to put its money where its mouth is -- and a host of rivals such as Apple and Google's YouTube also in the hunt -- a war is breaking out over who controls streaming rights to current episodes.

The studios that supply the networks with shows argue they own the streaming rights to in-season shows. But the broadcast networks that make a profit from repeats -- and stand to lose audiences, ad dollars and syndication revenue if viewers can see those same episodes on Netflix -- argue they control the rights.

"It's a big source of friction," said one TV executive familiar with discussions. "There are no agreements [on control of rights], but I think it will trend toward the networks being in charge of selling in-season in first run, and beyond that, the studio."

Netflix recently changed its pricing to offer a streaming-only service for $7.99. But to make it attractive the company needs more up-to-date content -- the kind currently available on Hulu and on broadcast networks' own Web sites.

Meanwhile, the more deals Netflix seals, the more uneasy Hollywood gets about the creation of a streaming giant.

"People are wondering if they did the right thing by selling to them," said one Hollywood source. "Are we mortgaging our future?"

Yesterday, Netflix signed up another content partner, indie firm FilmDistrict, for first-run movies in the traditional pay-TV window, jumping ahead of premium pay-TV services like HBO that would normally get first crack.

Netflix is on track to deliver some 300 million streams, double the number last year, according to research firm Screen Digest, but has spent just $350 million on digital rights to date.

If Netflix gains access to current TV shows, it would be in direct competition with Hulu, the Web TV hub backed by News Corp., NBC Universal, Disney and Providence Equity Partners. News Corp. also owns The Post. Hulu offers a Hulu Plus subscription service with access to current seasons of shows as well as older episodes for $7.99.