Friday, April 8, 2011, 10:29 AM ET|Posted by Will RichmondA couple of weeks ago, in "Showtime Circles Its Wagons, But to What End?" I questioned Showtime's decision to withdraw from Netflix streaming rights to early seasons of 2 of its hit shows, "Dexter" and "Californication." One of the points I made was that Netflix would survive this loss just fine because they have enough streaming content already, and more coming all the time.
Sure enough, Netflix has more than proved my point, announcing a deal last Friday with 20th Century Fox that gives it streaming rights to the first season of the Fox hit "Glee," the first 2 seasons of the FX favorite, "Sons of Anarchy" and the library of "Ally McBeal" and "The Wonder Years." Then this past Wednesday, Netflix announced a deal with Lionsgate for streaming rights to the first 4 seasons of AMC's signature series "Mad Men," with 3 more seasons to follow after their on-air run (Netflix already had the Canadian streaming rights to the show).
Taken together, the deals further underscore how the world order has shifted to Netflix's favor. No other online distributor or potential online distributor has both the financial muscle and the willingness to flex it as does Netflix. For studios and networks starving for incremental revenue, rich licensing deals with Netflix are irresistible. In the case of "Mad Men," for example, Netflix is reportedly paying $1 million per episode.
Plenty of industry wags continue to wonder how long Netflix can continue acquiring content at this pace. I'm still a believer that between the postage and DVD cost savings that streaming generates for Netflix, plus its extremely disciplined financial management, Netflix is working well within its financial parameters. The latest deals prove why Showtime and others who are turning their backs on Netflix streaming, rather than embracing it, should reconsider and figure out how to craft productive deals.