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ABC Stacks the Deck in Battle for Streaming Rights

In the trench war between TV networks and streaming services over series stacking rights, ABC has broken through enemy lines.

On March 18, the network announced a deal with Warner Bros. Television that will make all in-season episodes of any future series from the studio available on ABC digital platforms. Networks tend to stack five rolling episodes for most shows. The ABC-Warner Bros. deal acknowledges the continued shift toward time-shifted viewing and binge watching.

It also gives ABC a victory over the digital competition — in particular Netflix. The streaming service has asserted often that it will not pay top dollar for shows that don’t come with exclusivity, making it difficult for networks to secure stacking rights.

“We really want people to value the subscription, and the more ubiquitous the content is in other places, the less valuable that subscription appears to be,” Netlix chief content officer Ted Sarandos said at the winter Television Critics Assn. press tour last year.

But in its pursuit of exclusivity, Netflix has pivoted hard toward original series. That’s where Sarandos has said the company will direct the bulk of its massive programming budget going forward. Though Netflix was willing to pay roughly $2 million per episode for Sony’s “The Blacklist” and Warner Bros.’ “Gotham” back in 2014, those deals now represent a high-water mark for subscription video-on-demand rights fees.

And as Amazon and Hulu have also ramped up original development, broadcasters have grown serious about their own digital products.

The networks face growing concerns that their businesses could be cannibalized by the digital companies they’ve been licensing content to for years. To preserve the old television ecosystem, networks are pouring resources into competing head-to-head with the streaming services. CBS is developing a “Star Trek” series for its All Access service; ABC is prepping its own originals for a revamped WatchABC app.

But the networks lacked the foresight to lock up SVOD rights for all their shows in preparation for these new platforms. They need content.

“The networks are looking toward what their futures are going to be in terms of their sites vs. what rights they are going to be making available to other streaming services,” said Bill Carroll, senior VP and director of content strategy for Katz Television Group.

CBS told investors last week that 60% of All Access viewing is of current-season primetime shows — proving that customers are hungry for catch-up viewing options. The Warner Bros. deal means ABC will be able to provide more of them.

What Warner Bros. gets is a likely increase in license fees from the network. It also gains competitive edge when shopping its shows to ABC — which, like all broadcasters, wants to own as much of its programming as possible. The studio has two pilots, comedy “Dream Team” and drama “Time After Time,” at the Alphabet. The stacking deal doesn’t hurt either’s chance of going to series.

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