Netflix, CW Near Deal That Accelerates Streaming Window as Hulu Ends In-Season Pact (EXCLUSIVE)

Flash Supergirl Musical
Courtesy of The CW

Netflix and the CW are close to finalizing a megabucks new deal covering scripted series that significantly speeds up the availability of the shows to less than two weeks after each season ends on the network.

The expanded pact with Netflix comes as CW and Hulu are parting ways on the deal that made selected current episodes of CW series available for streaming on a rolling-five basis. CW first set its streaming deals with Netflix and Hulu in 2011. Those deals were crucial to shoring up the future of CW five years ago, and now the expanded Netflix pact is a testament to the network’s improved performance.

With the Hulu deal ending, in-season streaming access to CW series will flow through the advertising-supported website and app as well as its affiliate stations’ VOD deals with various MVPD providers. In-season access will remain limited to a rolling-five most recent episodes, in most cases.

Reps for CW, Hulu and Netflix declined comment. The CW-Netflix deal is expected to be unveiled later this week.

The limited access to episodes was the big sticking point for Hulu, which is said to have pushed CW to offer full stacking rights on its Hulu service as a condition of renewing the deal. Hulu and CW parent companies CBS and Warner Bros. negotiated on and off for months but late last week the sides formally ended the discussions. The existing deal is believed to expire in early October.

Netflix, meanwhile, has stepped up the financial terms of its output deal in order to speed up the arrival of the shows on the SVOD giant. Previously, CW series came to Netflix after a months-long wait, usually timed to land a week or two before the start of a new season for continuing series.

The total pricetag of the deal is tricky to estimate for Netflix because it involves so many shows and variables such as escalators that kick in depending on how long a series has been on the air and how it performs. But it is sure to rank as one of the largest output deals in the SVOD arena to date with value that could exceed $1 billion. The deal is believed to run five years, with a tail that gives Netflix access to the CW library for several years after each series ends its run on the network. The deal covers domestic rights to the shows, not the vast expanse of Netflix’s worldwide footprint.

The deal also marks the closest window Netflix has ever secured to the in-season period for primetime entertainment series, and less than a year after CEOs of several media conglomerates publicly indicated they were going to toughen their licensing strategies with subscription VOD services that were arguably cannibalizing linear ratings. “We are evaluating whether to retain our rights for a longer period of time and forego or delay certain content licensing,” Time Warner CEO Jeff Bewkes told investors on an earnings call last November.

That said, the CW-Netflix pact may end up an outlier to an otherwise increasingly conservative next wave of licensing deals between streaming services and conglomerates, many of whom are focusing more on their own streaming extensions.

CBS Corp. and Warner Bros., which produce the vast majority of CW’s primetime series, led the negotiations. The CW’s studio partners came back to the table this time around with a stronger hand compared to five years ago, thanks to CW’s growth under president Mark Pedowitz. Netflix’s willingness to step up for earlier post-season access to the shows reflects the sizzle CW has generated with its fleet of DC Comics-branded superhero shows, notably “The Flash” and “Arrow,” and buzzy critical darlings “Jane the Virgin” and “Crazy Ex-Girlfriend.”

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.

CW’s move to finalize the course for its streaming distribution for the next few years comes weeks after the network finalized a new five-year affiliation pact with its core Tribune Broadcasting station group.

Hulu’s strategic focus remains on being the hub for next-day access to current series from its partner networks Fox, NBC and ABC, in addition to its output pacts with FX and AMC Networks, Epix movie deal and off-network acquisitions including the “Seinfeld” library.

Hulu is also in the midst of a push to become a virtual MVPD by offering a skinny bundle of channels via OTT distribution.

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  1. mnn2300 says:

    CW – I hope Netflix is paying you big $$$ cause you just lost a lot of viewers, no way am I going back to commercials on your crappy website.

  2. terry says:

    yeah this will make it on me because I hate commercials and by the time I’d get around to the first I’ll interest in a show real quick because of the commercials this would be more effective for Netflix if they would post them the next day by the time they post it most will be burnt out on it

  3. Hatchet says:

    This is heart breaking. I’d cancel my hulu if i still didnt watch agents of shield, gotham and a few others. Waiting till a season is over before you can watch it is depressing. I am already doing that with walking dead and supernatural so im always a season behind. I do wanna see these shows but i don’t want to steal them. If hulu doesnt want these shows we need a another streaming site to legally pick them up.

    • Kaltenar says:

      We should be able to watch them via the CW app. I liked Hulu because 1) I could watch the ABC, Fox, and WB a how’s all on 1 app. 2) I could the Hulu app on my BluRay player to watch the shows on my TV. The price of Hulu is not worth it for 3 shows {Sleepy Hollow, Gotham, and SHIELD}. Looks like I might be able to use my Internet provider’s app to watch all the shows.

  4. acurat says:

    Hope the CW is happy. Hulu contributed strongly to the +7 Neilson ratings. I am not going to run around to each network, CW included, to keep up with each of its shows. That just invite them to charge you to watch. I will just wait until the full season is available on Netflix. There is just too much out there available on a next day basis for them to win on this matter. They are going to lose +7 viewers I will bet.

  5. This is a crappy deal – I have commercial free Hulu and most of the shows I watch on Hulu are from the CW. This is a huge step backwards not allowing customer’s next day streaming access of all CW shows. The only thing this new deal with Netflix provides is the availability to watch the current season 4 months earlier than before… Whoopee (aka sarcasm). I’d rather have next day access to these shows then have to wait until the end of the ENTIRE season to watch the newest episodes. Big mistake Hulu; you just pissed off a lot of people… I refuse to deal with CW’s garbage website. Even without commercial free Hulu, it was better than anything else out there. Good-bye Hulu, I hope you learn from this huge error… Thanks for nothing.

  6. Robert Schulhof says:

    That’s too bad, there will be several CW shows I liked but won’t be able to follow now. I cut the cord and relied on Hulu to follow shows. I am not paying an extra $100 to get cable again. I might have watched on the CW app but as far as I can tell Firestick doesn’t support it. I am not going to squint at my iPad or phone to watch when I have a perfectly good big screen. I think this is a foolish deal by CW, almost as bad as CBS’ ratings killing plan of trying to make people pay more money for their crappy app with commercials. These networks forget they exist for us, we don’t exist for them. With 400+ scripted shows out there, I can do without CW, but how many like me can they do without?

  7. Just tell me WHY ? Can’t Netflix just get the movies that I put on my QUEUE or do I have to buy everything from Jeff Bezos at amazon . com only because they have actual stock – It seem’s as though Netflix stand’s around the redbox only to get me the latest crap I’ve requested ” Breaker Morant ” and “Susperia” over 5 month’s ago ? Billionaire’s – yeah go buy it . . . I feel stupid giving these people any money

  8. Jiltedtoo says:

    All that has changed for me, is I will torrent the CW shows I currently watch, The Flash, Arrow, Legends and 100. I was also watching IZombie, Vampire Diaries and the Originals, but will probably drop these for watching on Netflix when the season is over.

    CW wont feel the affects of this decision until they start releasing new shows, which will have less exposure and less new people watching. If not for Hulu I would have never started watching any of the CW shows I watch now.

  9. Phonsofite says:

    I wouldnt mind Netflix, but they still INSIST on using antiquated and broken (no longer offically supprted) Silverlight from Microfost, and FLASH.

    When the go compeltey html5, then I will be noticing. For now, I could care even less than zero.

  10. lizriz says:

    So good on Hulu for pushing for stacking and for walking away from a bad deal. Hulu was a great fit for the CW, whereas I tend to think of Netflix as having darker, high-budget content. I think of Hulu as the online space for people who love network television. Plus, it sounds like Netflix isn’t getting next day and stacking either. That is really where it’s at for online television viewing. When I’m interested, I want to able to catch up with your show, and start watching your show for reals. Can’t wait to see what content Hulu gets instead. SyFy Network, I’m looking at you!

  11. lizriz says:

    I’m an ad-free Hulu subscriber. I love Hulu, and that is where I watch the bulk of my TV. I also love Flash and the CW, but Hulu was right to push them for stacking rights. When I learn about a new show I want to watch, I immediately look to see if I can catch up with all the episodes and then start watching it. If I can’t, I don’t watch it. If a show’s not on Hulu, I probably don’t watch it, with a few exceptions for specific shows I buy on Amazon (mostly AMC or BBC). I would love to watch The 100, Arrow, and Supernatural, but since I can’t catch up with all the episodes, I’m not watching those shows. I was super hoping that the first season of Supergirl would hit Hulu, and then I could start watching it, but that certainly seems unlikely now. Meanwhile, every single time I try to watch a show on any network’s own website, the viewing experience sucks balls. I even tried to pay for CBS to watch Supergirl, and hit total suckage. I love Elementary, but again, not on Hulu. CBS’ service sucked and isn’t worth just one or two shows on just one network. I’ll try watching Flash on the CW’s website, probably, but I don’t have high hopes, and I would never start watching a new show on a network’s website. For me, there’s so much quality television available, it’s easiest to just watch what’s on Hulu, and wait for other opportunities to catch up on the shows that aren’t later. Sticking to Hulu helps me limit how much time I spend watching television, too. :)

  12. Donald Hicks says:

    I use Hulu to watch CW Shows a day or two after it airs. Since they made a deal with Netflix, it will air two weeks after the season is over with. I’m not waiting to view the new season of these shows, next May or June after season is over with. I’ll find another source.

  13. shinnstoneer says:

    The CW is doomed or shot itself in the foot comments are interesting in the wake of an estimated $1 billion plus deal over the next five years. There will be plenty of users willing to go to CWTV for every individual willing to pirate the programming As a fan of many CW shows this news is great to receive.

    The stability of the network has grown tremendously and much of that in the last month or two due to distribution arrangements. The gap between the big four and The CW continues to slowly narrow.

  14. jedi77 says:

    So, Netflix is essentially spending megabucks to peddle inferior shows to teens and tweens?
    With the Sandler deal, the Gervais deal and this CW deal, Netflix is spending ZERO money on things discerning viewers want to watch.
    If they keep this up, I am back to torrents in no time.

  15. Manuel says:

    What about outside US?

    Can we watch CW shows after 2 weeks aired in US in Netflix?

  16. Peerless Girl says:

    Welp, There goes my Hulu sub. This was 90% of the reason I kept the service paid. That and the massive anime backlog they just flushed. Seems like they’re getting out of the business of specifically what I’m watching, that money can go to Crunchyroll and sadly, Amazon, or I get to start torrenting again, assuming I dislike the CW website interface, and unless it’s changed recently, I do.

  17. Turd Ferguson says:

    It’s fascinating to see so many people who are familiar enough with modern technology that they know how to use Hulu, but are apparently completely unaware of other streaming sites, or of bittorrent.

    • Jeremy says:

      Not wanting to pirate doesn’t mean they’re not aware of it – they just chose not to be thieves.

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  18. Tyler Montgomery says:

    The CW just shot themselves in the foot. I watch 7 of their programs or should say “watched.” I refuse to watch any TV show on their craptastic website or my phone. I didn’t shell out for a 55″ HDTV to have to watch on a 5.5″ screen. That was the whole point of my Hulu subscription to begin with. You guys can probably kiss your struggling network goodbye and start sending out some resumes unless you decide to crawl out of the Dark Ages. Really stupid move guys.

  19. Taylor Craig says:

    Any word on if the revamped MADtv will be on Netflix?

  20. Steve says:

    Looks like I’m done with CW shows now. Would rather just stop watching their content than have to deal with whatever ad-heavy clunky website they’re peddling. Wake up and smell the 21st century… in the meantime, good riddance.

    • Everfolly says:

      Except that their website and app are near exactly as ad-clunky as Hulu, and no ads for their shows on Netflix. Wake up and smell the twenty first century? Hulu makes plenty of money off of ads, and CW doing the same in their app/website only offering the service for free to customers (due to a smaller library, but one with arguably equal demand), only speaks to their intelligence in the current market where many will torrent without hesitation.

      • loyalekoinu says:

        Except people pay to use HULU sans ads. So they were getting first run shows the day after they aired ad-free. If I remember what the CW website was like there was an ad every 2 seconds of the show. I’d rather wait for them to come onto Netflix. The problem is that “waiting for Netflix” doesn’t give them the stats needed to decide if they want to order a new season of a show. Then shows you actually like get cancelled because you didn’t sit through 25 minutes of ads in a 45 minute show.

  21. Christopher Panasuk says:

    My Hulu subscription is meaningless now. So it looks like I can cancel that. I do not have cable so I will not be able to follow the DC current lineup until they appear on Netflix.

    • rahajicho says:

      I also don’t have cable and have just canceled my Hulu subscription. You can keep up with the DC shows on and the app. Both the app and the website offer terrible viewing experiences, which is why I subscribed to Hulu in the first place.

      • max says:

        Ditto. After Hulu, I’m going to try out using a tuner card with my computer to catch these CW shows. It should be a fun project if nothing else.

  22. Mika D. says:

    Hulu is dead and Netflix is on its way out… especially with all the free alternatives out there.

  23. Well I guess I’ll be canceling my Hulu subscription. Arrow and Flash were the main reason’s I had Hulu.

  24. anonVariety says:

    While I’m happy for Netflix, I would have preferred Hulu obtaining full in-season stacking rights.

    I’d prefer to stay (relatively) current with their four DC comics shows and now that has become significantly more challenging to do so.

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