Recently, Netflix announced streaming deals with Relativity Media and Epix (the Paramount, Lionsgate, MGM distribution consortium). When we read the press we sort of nodded our head and moved on, slightly rolling our eyes at the purported “$1 billion” value of the five-year deal.
Dismissing this as "just another" expansion of the Netflix library, we got it wrong. We should have paid more attention and stopped to think, as today’s Tom Lowry piece in Variety reminded us.
The Epix deal in particular is significant, not so much for its size, but because it marks a clear, unambiguous definition of a large-scale deal for an entirely new streaming window, 90-days post-Pay TV, as Lowry points out:
The deals of the past few weeks have grabbed the attention of film and TV execs on the distribution side because it establishes a clear market rate for the value of streaming rights for fresh theatrical product. ... the Epix deal is a direct transaction with Par, Lionsgate and MGM for streaming, which sets a market precedent for separating out Web streaming from pay TV rights for a traditional linear channel.
That seems exactly the right way of netting out why these deals are important. In our on-and-off anecdotal conversations with entertainment lawyers (admittedly more about TV and less about theatrical releases) we were left shaking our heads. While we’re hardly insiders in the mix of rights deals, we remained surprised how little attention (still) was being paid by content owners to establishing new, clearly-separated rights classes and windows for web distribution.
Netflix is clearly leading the charge to change this.
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