Netflix, the undisputed king of full-season TV binge-viewing, is now preparing for battle with networks, along with cable and satellite providers, on a new front: in-season binge-watching.
Currently, viewers can easily watch previous full-seasons of a series via Netflix or other streaming providers like Amazon Prime and Hulu Plus. A recent Nielsen study found that 88% of Netflix users engage in binge-viewing, defined as watching three or more episodes of the same TV show in a single day. The practice has in turn helped boost ratings for shows like Breaking Bad and Scandal.
But when it comes to binge-watching a show’s current season, options are very limited. The studio’s deals with Netflix/Amazon Prime/Hulu Plus usually cap the number of current episodes a network can offer via video on demand (VOD) at five. So if viewers want to binge, unless they purchase individual episodes via iTunes or Amazon on Demand, they must wait until the summer when the whole season becomes available via a streaming provider, which denies networks (and their advertisers) the opportunity to capitalize on these eager new potential viewers.
Networks are increasingly pushing to offer all episodes of a current season , what’s known as “in-season stacking rights,”on demand via VOD, online and the network’s mobile applications. “That’s where the big fight is happening now,” said Marc Graboff, president of Core Media Group, American Idol’s parent company, at Variety’s Entertainment & Technology Summit on Oct. 21.
Emboldened by its record number of streaming subscribers, Netflix is standing firm, threatening to reduce its licensing fees for shows that viewers have already binged in-season. “The less exploited shows are through on-demand services, the more valuable they are to us,” Netflix chief content officer Ted Sarandos told The Wall Street Journal last month, adding that cable operators, desperate to stay relevant, are trying to “marginalize Netflix.”
Those lost fees for shows Netflix deems “exploited” could be significant, according to Vulture. Netflix, which pays as much as $750,000 per episode for streaming rights, has said it will impose a penalty of 20-50% per episode from shows that are stacked.
Not surprisingly, the networks disagree with Netflix’s take on in-season stacking. “They’re not in the advertising business, they’re in the subscriber business,” an unnamed television exec told TV Guide. “For us, we want to be able to, if appropriate, stack shows for the whole season because people sometimes find these shows late. They need to discover it.” As Chuck Saftler, COO of FX Networks and president of program strategy pointed out at the Variety Summit, “To have a show like The Americans and [consumers] can’t go back to the beginning of the season—that doesn’t make any sense.”
That’s why FX and Turner are turning up the heat and now telling studios that they will not pick up new shows to series unless they are granted those coveted in-season stacking rights. “This is about the future,” a senior cable executive told Vulture. “It’s about finding a way to make the current system more viable as non-linear consumption becomes more and more important.”
Cable and satellite companies are getting in on the action as well, securing stacking rights as part of their retransmission deals with broadcasters. When Comcast signed its latest retransmission agreement with FOX in February, it landed current-season VOD rights to “key primetime series” on FOX and FX.
Look for many more such agreements, and clashes, in the months ahead, until both sides finally stop saber-rattling and figure out a way for everyone to maximize their profits. As one TV executive told TV Guide, “I think there’s room for both of us.”
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Image: Mike K.
This article originally published at Quartz here
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