Netflix deals

Dealmakers Impact Report 2010

Ted Sarandos
Chief content officer, Netflix
For the past decade, Sarandos’ primary goal has been to expand the breadth and quality of content for Netflix subscribers, now at 15 million. In 2010, he delivered a one-two punch that shifted the Hollywood power structure by creating a new player in the pay-TV arena and giving Netflix members streaming access to studio-quality films.

KEY DEALS: First, Netflix and Relativity partnered in early July in a deal that an insider says brings as many as 30 Relativity-owned films a year to Netflix’s growing base, which now eclipses even Showtime’s carriage. One month later, Netflix finalized a five-year, $900 million deal with Epix pay cabler — two years in the making — that allows Netflix subscribers to stream Paramount, Lionsgate and MGM films during the pay-TV window.
“Hollywood was very nervous about Netflix, but now they’re aware of what we can bring in the long term,” says Sarandos, who oversees a staff of 75 in the company’s Beverly Hills headquarters. “In the past six months, you now see most deals in this town have a Netflix component. That’s the big difference for us. Now we’re the first stop. It’s much more fun to be a source of people’s success than a source of their anxiety.”

SPARE TIME: Jets out of L.A. regularly to be with wife Nicole Avant, the U.S. Ambassador to the Bahamas, and their two chidren.

TOP CAUSES: Exploring the Arts, Film Independent.

Mark Greenberg
President, CEO, Epix
As the newest pay cable kid on the block, Epix was struggling mightily to generate revenue. Then, Greenberg struck a bold five-year deal with Netflix in August that immediately put the fledgling operation in the black.

KEY DEAL: Under terms of the deal, Netflix will pay roughly $900 million in licensing fees in exchange for the right to exclusively stream Epix content — a slate largely made up of Paramount, Lionsgate and MGM films — during the pay-TV window.
HBO and Showtime vet Greenberg also had conversations with players such as Hulu, Amazon, Blockbuster, Apple and Best Buy but ultimately signed on the dotted line with Netflix because “the economics made it worthwhile.” Still, negotiations with Netflix carried on for two years, and Greenberg admits there were tradeoffs. “A lot of this is unchartered territory,” notes the New York native, who earned his M.B.A. from Columbia U. “Hindsight will eventually inform whether they were concessions or not.”

SPARE TIME: Golf, watching his kids play soccer.

TOP CAUSES: Nantucket Film Festival, Reisenbach Foundation.

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