Exclusivity key to new pacts
Netflix’ chief content officer Ted Sarandos hopes to follow a landmark pact with Walt Disney with more big studio output deals including Warner Bros. and maybe Sony and Universal once their current agreements expire. But new pacts would require exclusivity and condensed windows, lack of which is why Netflix didn’t renew with Epix in September.
In a wide ranging conversation with Harvey Weinstein at the UBS Media conference in Gotham, perfectly timed a day after the announcement of a three-year, exclusive output deal that includes all Disney, Pixar, Marvel and Lucasfilm fare (once the Mouse’s purchase of the “Star Wars” producer closes). Thanks to Disney chairman Robert Iger’s shopping spree over the past decade and a separate Netflix deal with DreamWorks Animation, the streaming service now has near total domination of the animated space, said an admiring Weinstein.
Short of sweeping output deals, Sarandos said, Netflix could continue to carve out big-event family movies like it did with Universal’s “The Lorax” and “ParaNorman” that would have otherwise gone to the studio’s current output partner Starz. Those kinds of pics do incredibly well for Netflix, he said. “Maybe we could institutionalize that, instead of making them one offs.” He noted that kiddie fare isn’t a big draw for pay-TV networks like studio’s current output partner HBO and Starz
Starz is Disney’s current partner but will move aside for Netflix when its Mouse deal expires in 2016. Netflix has already started to air some Disney library and direct-to-video content.
Weinstein seemed bowled over by Netflix’ boldness in “inking the biggest content deal probably in the history our business.”
Sarandos agreed it was “a game changer and it definitely changes the landscape.”
He said Netflix will stay away from sports and from anything that lends itself more to live than on-demand viewing. It will continue to focus on original content that he said has more of a chance to grow audiences without the pressure cooker of advertising, ratings and time slots. “Trying to get Americans to do the same thing at the same time is hugely expensive,” he said. “A solid double is not a catastrophe for me, but a solid double in a very precious timeslot has got to go.”
The move seems to have temporarily quieted corporate raider Carl Icahn, who acquired 10% of Netflix saying he wanted it to re-examine its strategy and who often pushes companies to sell. Netflix hastily adopted a shareholder rights plan that would make it hard for Icahn to buy more stock.
Sarandos said Icahn has “been publicly an privately very supportive of the business and management team, and our decisions. It’s hard to say how it’s going to go, but so far it’s been very positive.”
Weinstein, who had a long run with Disney himself as head of Miramax, founded and now runs The Weinstein Company. Asked about the state of Hollywood financing, he said the key is “good ideas and tenacity to pursue them. You just have to hang in there. You know, the world got crazy after 2008 but capital is slowly coming back to Hollywood.”