In-Season Stacking Rights: Netflix, TV Biz

TV execs discuss the fight to retain rights from SVOD bidders at Variety summit

Who owns binge viewing?

That’s the burning question separating subscription VOD services like Netflix from TV networks and their distribution partners, not to mention the studios stuck in the middle, as a heated discussion Monday at Variety’s Entertainment & Technology Summit indicated.

“That’s where the big fight is happening now,” said Marc Graboff, president of Core Media Group, the company behind “American Idol.”

The crux of the conflict is over what’s known as “in-season stacking rights,” which are rights to all of the episodes in the current season of a TV show. TV networks and pay-TV distributors generally have rights only to what’s known as the “rolling five,” the last five episodes of a show that aired on TV.

However, SVOD services want to bid those rights away from networks and distributors, which are loath to pay much extra for those rights given that they feel entitled to those episodes from their current affiliate deals. What’s more, companies like Netflix and Amazon say that exposing current-season content to pay-TV subscribers dilutes the value of the content they’re willing to pay top dollar to put on their own services.

And that doesn’t sit well with studios either that want to maximize revenues in the SVOD window.

“The challenge is financial,” said Lionsgate Television Group chairman Kevin Beggs (pictured above). “The value of Netflix down the line is going to be reduced if there’s play in the first season.”

All involved are fine with SVOD services buying up rights to previous seasons, but when it comes to the current season, all bets are off. The notion is that if a series can make available all of the episodes from a current season at any point during that season, it’s more likely they can induce the catch-up viewing that leads to tune-in for the latest episodes.

But as Chuck Saftler, president of program strategy and COO of FX Networks noted, networks need to have control over their content. “To have a show like ‘The Americans’ and (consumers) can’t go back to the beginning of the season — that doesn’t make any sense,” he said.

“We want to stream all of our shows from a season, as opposed to two or three or five (episodes),” said Mark Stern, president of original content at Syfy.

“Studio and network interest diverge sometimes, and that provides an extra complication to things,” said Beggs. “I’m not sure how it’s going to get resolved but it will.”

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