"That means licensing fees can keep climbing as Netflix moves more of its business to streaming and away from DVDs. Sending a disc round-trip can cost as much as $1, and Netflix mails about 2 million DVDs a day, whereas streaming a movie costs the company about a nickel. “We’re direct to the consumer, so we don’t give half our money to a cable company,” Sarandos says. “Our money goes directly to the content providers.”
Some content comes and goes, as in the case with the Timothy Hutton vehicle Leverage, to which Netflix obtained streaming rights through executive producer Dean Devlin. That didn’t sit well with TNT, so when the channel renewed the show for a third season, it made sure to secure digital rights, leaving Netflix with streaming rights to some seasons but not others.
“But TNT had to pay a lot more to secure the rights from Dean — it’s exactly why Netflix is exciting for networks and studios,” Sarandos says. “We’re an exciting new buyer in this space. We bid up the price of content.”"
Eg, Netflix is good for the creators, not so much for the old-economy gatekeepers.
"That means licensing fees can keep climbing as Netflix moves more of its business to streaming and away from DVDs. Sending a disc round-trip can cost as much as $1, and Netflix mails about 2 million DVDs a day, whereas streaming a movie costs the company about a nickel. “We’re direct to the consumer, so we don’t give half our money to a cable company,” Sarandos says. “Our money goes directly to the content providers.”
Some content comes and goes, as in the case with the Timothy Hutton vehicle Leverage, to which Netflix obtained streaming rights through executive producer Dean Devlin. That didn’t sit well with TNT, so when the channel renewed the show for a third season, it made sure to secure digital rights, leaving Netflix with streaming rights to some seasons but not others.
“But TNT had to pay a lot more to secure the rights from Dean — it’s exactly why Netflix is exciting for networks and studios,” Sarandos says. “We’re an exciting new buyer in this space. We bid up the price of content.”"
Eg, Netflix is good for the creators, not so much for the old-economy gatekeepers.