ABC and Warner Bros. TV Group have hammered out a template agreement granting the network full in-season stacking rights to all episodes of new series, settling an issue that has become increasingly contentious between networks and studios as both sides push to better monetize on-demand delayed viewing platforms.
ABC said the deal will grant the network streaming and on-demand rights to all episodes of new series launching next season and in the 2017-18 season, rather than the current practice of WB allowing ABC to offer a rolling five episodes on its various platforms. The deal with Warner Bros. will help ABC’s efforts to launch an enhanced streaming app, something that is known to be in the works at the Alphabet.
In exchange for the expanded rights to episodes, Warner Bros. undoubtedly will receive a bump in its license fee to compensate for the increased exposure that the episodes will have on ABC platforms. Netflix is known to have warned studios that it will pay less for shows with episodes that are made entirely available during the season on network platforms, because the exposure is so much greater. That dynamic has set off a tug-of-war between networks and their studio suppliers.
Warner Bros. will retain its rights to sell the rights to shows to SVOD platforms after each season is completed on the network and day-after electronic sell-through rights (aka the iTunes download-to-own model). The studio also retains the option of taking shows out early in traditional syndication and as a DVD release.
“This is a real win for network television viewers,” said Jana Winograde, ABC’s exec VP of business operations. “Giving our audience even more opportunities to catch up on their favorite shows in their entirety, on demand, only enhances their loyalty to and engagement with ABC and our series.”
“Along with our partners at ABC, we’re pleased to offer viewers the convenience to discover and watch our shows on their own schedule and on the screen they choose,” said Craig Hunegs, president of business and strategy for Warner Bros. TV Group. “For our studio, the more people watch our shows, the more valuable they become for us over the long run.”
The deal comes at a time when networks are increasingly focused on owning their own programming and being able to generate revenue from that programming via SVOD and syndication deals. That focus has challenged the ability of outside studios such as Warner Bros. to sell to the networks.
Stacking rights have become a major sticking point in pilot deals when networks and outside studios attempt to come together — sometimes enough to scuttle deals entirely. ABC has ordered two pilots from Warner Bros. this season: the single-camera comedy “Dream Team” and drama “Time After Time.” Either pilot would be covered by the deal if it were be picked up to series. Under the agreement, ABC would only be able to carry one season at a time on it digital platforms.
Chief among those platforms is the WatchABC app, which ABC is in the process of developing the first original programming for.
Warner Bros. also produces comedy “The Middle” as well as reality franchise “The Bachelor” and its spinoff for ABC, but the new stacking deal would not retroactively affect those shows.
Warner Bros. and ABC have a history of striking template-style deals to address contentious issues. In the late 1990s the network and studio worked out an agreement for a perpetual license fees on shows that alleviated big-money battles over series renewals. And in 2001 the sides came to terms on a deal that gave the network limited rights to air reruns of Warner Bros. shows on non-ABC platforms.
Daniel Holloway contributed to this report