You will be redirected back to your article in seconds

Netflix, CW Output Deal Reflects Changing Priorities for Key Players

In 2011, digital licensing deals with Netflix and Hulu rescued the CW from what was likely a path to extinction. The network had been losing money, and its parent companies — CBS Corp. and Warner Bros. — were growing impatient. The CW had been an early beneficiary of the spending on high-end TV content that has rained down on Hollywood’s largest studios during the past half-decade.

When it came time to renew those pacts this year, the decisions made by all of the players spoke volumes about how the SVOD business has evolved — and how the CW has reinvented itself with the help of a few superheroes and some plucky young women.

On July 5, Netflix and the CW unveiled a new agreement that is game changing for both sides. Netflix decided to step up its spending on the CW’s scripted-series slate, in exchange for collapsing the wait time for new seasons of each series to just eight days after a show wraps on the network. That compares to as much as four months or more under the previous deal. Netflix’s commitment could total up to well past the $1 billion mark, depending on the volume and longevity of the CW scripted series during the deal’s five-year lifespan.

Hulu, on the other hand, had struck an initial deal with the CW for next-day access to in-season episodes, but limited to the five most recent episodes. When renewal talks came around, Hulu pushed for a deal that would include all in-season episodes, an example of “stacking” rights that would likely have cost the CW its Netflix-library deal entirely.

The degree to which Hulu sought to stay in the CW business is subject to interpretation. But the pushback against the mere “rolling five” episodes underscores how much Hulu’s game plan has changed in the past five years.

The company jointly owned by Fox, Disney, and NBCUniversal is emphasizing its subscription product rather than the free, ad-supported service that existed when the original CW-Hulu deal was first made. Hulu’s paying customers want to have bingeable access to all available episodes, not a dim sum sampling of the last five bites.

Netflix, meanwhile, is said to have considered the option of offering a few in-season episodes for each show in addition to carrying past seasons in full. But that wouldn’t have come cheaply. Netflix found victory in chopping down significantly on the wait time for new seasons to land in full on the service.

For the CW, the decision to forgo an in-season licensing deal with an outside SVOD platform is a bet that it can do as well or better by funneling all of that viewing through its own ad-supported CWTV.com website and CW-branded app. In 2011, the CW needed the ubiquity of keeping its brand name shows in front of its youthful audience on Hulu, as well as on its home website. Five years on, the CW has more buzzy hits in its arsenal. The network is banking on fans of “The Flash,” “Arrow,” “Crazy Ex Girlfriend,” “Jane the Virgin” and others being able to search their way to CWTV.com, which will be the only authorized purveyor of in-season episodes, also on a rolling five basis.

Then as now, the deal-making process involved careful choreography between the needs of the CW, its parent studios, and Netflix, with CBS Corp. chief licensing officer Scott Koondel and Warner Bros. Domestic TV Distribution president Ken Werner leading the charge.

It’s understood that the CW carved out options in the Netflix deal for turning its network feed into an OTT service should the need arise to replace any broadcast affiliates. That’s a level of flexibility that the CW didn’t have under its old SVOD deals — and something it may not need now that it has set long-term affiliate renewals with its core local station partners, Tribune Broadcasting and Sinclair Broadcast Group. CW also gains new flexibility to work with OTT distributors such as Roku.

Koondel praised his counterparts at Netflix for their willingness to rewrite the business template in a way that worked well for both sides. “They were completely unselfish in their approach to this deal,” he said. “They realized that what’s good for the CW will be good for them, too.”

Over the life of the deal, the CW-Netflix pact is likely to rank as one of the richest TV output deals ever. That’s not bad for a network that was on the ropes just a few years ago.
(Pictured: “Jane the Virgin”)

More Digital

  • Xbox Series X: Next-Gen Console Revealed

    Microsoft Reveals Next-Gen Console, Xbox Series X, at The Game Awards

    The next-generation Xbox console is officially called the Xbox Series X, and will be released over next year’s holiday season, Microsoft revealed during Thursday night’s The Game Awards. Head of Xbox Phil Spencer took the stage at Los Angeles’ Microsoft Theater to make the big reveal about the project previously known as Project Scarlett, and [...]

  • The Game Awards

    How to Watch the 2019 Game Awards

    The Game Awards will be taking place on Thursday night and, fittingly, there are plenty of ways to stream the event online. The whole show will be streaming live starting at 5:30 p.m. PT/8:30 p.m. ET from Los Angeles’ Microsoft Theater on The Game Awards’ YouTube, Facebook, Twitter and Twitch pages. Additionally, for the first [...]

  • Neon-Hum-Jonathan-Hirsch

    Sony Music Invests in Podcast Production Firm Neon Hum

    In its latest move into the podcast biz, Sony Music Entertainment announced a strategic investment in podcast production house Neon Hum. Founded by podcast producer Jonathan Hirsch (pictured above), L.A.-based Neon Hum has helped create multiple podcast hits including MSNBC’s “Bag Man” with Rachel Maddow, Dateline NBC’s “The Thing About Pam,” Wondery’s “Room 20,” Crooked [...]

  • Hulu Hopes to Make Ads Part

    Hulu Hopes to Make Ads Part of Your Binge Session

    If you just can’t keep yourself from watching another episode of “The Handmaid’s Tale” or “PEN15,” then Hulu has an ad for you. The streaming-video hub is starting a trial run of new commercials aimed specifically at binge-watchers, which the company defines as subscribers who watch three or more episodes of the same series consecutively. [...]

  • Facebook

    Facebook Pledges $130 Million to Fund Content Oversight Board as It Hits Delays

    Facebook announced an initial commitment of $130 million to launch its new Oversight Board, which is designed as a way for users to appeal the social giant’s content decisions, but the entity is behind schedule with initial board members to be announced in 2020. The Oversight Board — which has been dubbed Facebook’s “Supreme Court” [...]

  • Rey (Daisy Ridley) in STAR WARS:

    Amazon Releases Secret 'Star Wars: Rise of Skywalker' Exclusive Video

    Amazon released a special behind-the-scenes look at “Star Wars: The Rise of Skywalker” in partnership with Disney and Lucasfilm, in order to — what else? — sell stuff to fans of the galaxy far, far away. The ecommerce giant debuted the Star Wars video Thursday (Dec. 12) exclusively on Amazon.com and Fire TV, with secret [...]

  • Jay-Z

    Tidal Gets Dolby Atmos Music, Jay-Z to Release Catalog in Immersive Audio Format

    Music streaming service Tidal has partnered with Dolby to bring Dolby Atmos Music tracks to its Tidal HiFi tier. This makes Tidal the second music service to support the high-end format. For now, support is limited to certain Android devices. Consumers may know Dolby Atmos as a surround-sound audio format for movies, which is being [...]

More From Our Brands

Access exclusive content