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The CW to Extend Netflix Streaming Deal

Jun 20, 2016

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Thanks to dr787 for the heads up.

From Hulu’s perspective, however, the CW in-season rights were not worth the pricetag to renew unless it came with stacking rights to all episodes — something that surely would have been a non-starter for CW and Netflix. From Hulu’s perspective, sources said, the vast majority of viewing was delivered only by CW’s two highest-rated shows: “The Flash” and “Arrow.” Moreover, fans of those two shows frequently lodge complaints with Hulu about the limited five-episode selection.

With Hulu bowing out, CW now has a stronger pitch to make to its broadcast affiliates about maintaining exclusivity of access to in-season streaming rights. The hope is that the tightened availability will boost streaming viewership via the CW’s website, which in turn could bring in more advertising revenue.

UPDATED: With the future of the CW on broadcast secured via new deal with Tribune, the attention shifted to the expiring SVOD pacts with Netflix and Hulu. The library Netflix pact, which covers previous seasons of CW series, is being extended, with the window following the season finale on the CW significantly shortened, while the in-season rights deal with Hulu is not being renewed.

The Netflix pact, which is being finalized, is being handled by the CW parent companies Warner Bros. and CBS Corp. whose studios Warner Bros. TV and CBS TV Studios produce all of the network’s shows and are the ones getting the revenue. The Hulu deal was made by and directly benefits the CW.

The Hulu agreement only covered next-day access to the most recent “rolling five” episodes of CW series. I hear Hulu was interested in a new deal if it could get in-season stacking rights, whose value has increased dramatically over the last couple of years. I hear that was not an option for the CW’s parent companies, which is understandable because in-season stacking rights undercut the value of complete seasons and would’ve likely jeopardized a new deal with Netflix.

For Hulu, having only five episodes at a time of the heavily serialized CW dramas did not work at the price point offered by the network, so the streaming service cooled negotiations about a month ago.

While some back-and-forth with Hulu continued, the focus over the past few weeks was on CW owners’ negotiations with Netflix, which provided the lions share of the CW’s SVOD revenue for the past 5 years, estimated to be as much as $1 billion.

The new deal, first reported by Variety, is said to be in the same ballpark for a similar 5-year term in which the window of the series becoming available on the streaming platform is cut from a couple of months to a couple of weeks after a season ends on the CW.

Meanwhile, the CW is retaining in-season rights to all of its series. At the upfront, the network announced that it will make “rolling five” episodes available to more than 80 million devices on mobile, tablet, and all major OTT platforms. There had been talk about a possible play on CBS All Access.

Reps for the CW, Hulu and Netflix had no comment.
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