Netflix’s Big Challenge: Securing Global Rights For Content

Ted Sarandos Netflix
Erik Pendzich/REX Shutterstock

Netflix has expanded its video-streaming business around the world, but it faces a daunting challenge in the months ahead: Getting media companies to sell it global rights to content.

“We are embarking on something that’s fairly new in the media space – the global licensing of programming,” said Ted Sarandos, the company’s chief content officer, speaking Monday at an investor conference held by UBS. “I don’t know if it is more difficult than expected but it has not been as easy road. All of the studios and networks have situated themselves to be regional sellers. They have never been global sellers and it makes complete sense that Sony and Disney and Warner Brothers would have regional sales teams. Now we are global buyers, and buying global rights to shows and movies, and there is some resistance to it, mostly from the regional sellers, people who are in charge of regional selling, who don’t want their jobs marginalized.”

Sarandos said Netflix has in recent months set up shop in countries including Portugal, Italy and Japan and he indicated the company has grown more effective with launches of its service abroad.

Netflix has been ramping up production of original series designed for specific markets around the world, Sarandos said, including Mexico and France. “We are working with great local talent, local producers, local casts and in local languages. I hope that we will have an original-language production in all of our markets in the next year or two.” English-language  productions made for U.S. audiences are faring well in various overseas markets, he said, including Japan, which has shown good initial interest in a quirky Christmas special Netflix recently released featuring comedian and actor Bill Murray.

Sarandos also suggested Netflix may no longer seek big “output” deals with U.S. movie studios, preferring to spend its money on original big-budget projects it can bring first to its subscribers, rather than others’ product ten months after its release date. He suggested a deal expected to start with Walt Disney could be the last of the big pacts Netflix does with studios. Unlike Disney, he said most movie studios’ product is not that differentiated in the marketplace.

Viacom’s Paramount, he said, “means nothing to people.” Sarandos then offered an apology to Philippe Dauman, chief executive of Viacom.

Sarandos said Netflix had about ten different movie projects in production that he expected to debut in 2016, with a film featuring Brad Pitt among them.

Other programming highlights for next year include “The Crown,” a drama about Queen Elizabeth; a series about the birth of hip-hop in 1970s New York produced by Baz Luhrmann; a comedy featuring Ashton Kutcher, Danny Masteron, Debra Winger and Sam Elliott, called “The Ranch”; and the revival of old sitcom “Full House,” called “Fuller House.”

Sarandos said Netflix is not interested in getting into a daily news program or securing rights to big-league sports, suggesting that those formats work better for live viewing rather than on-demand audiences.