By Brian Stelter (The New York Times)
CBS is likely to earn about $200 million over the next two years under the deal it reached with Netflix this week to stream TV shows from the network’s library, an analyst estimated on Wednesday.
The two companies announced a nonexclusive streaming deal for some TV shows on Tuesday, giving CBS a new incremental source of revenue and giving Netflix a bit more content to promote to its customers.
That content includes “Medium,” which was recently canceled; “Flashpoint,” which is shared with CTV in Canada; and a raft of old shows like “Frasier,” “Family Ties” and “Cheers.” (Some of the shows included in the package are associated with other networks, but were distributed by CBS’s studio.)
Importantly, the deal excludes all of CBS’s biggest shows, reiterating the network’s position that television comes first and the Web comes second for now. The deal’s terms were not disclosed. Barclays said in an analysts’ note Wednesday that the deal was worth roughly $200 million to CBS.
“We believe the deal is a clear positive for CBS, as the network is now able to monetize its library content in new, incremental ways without devaluing that content or jeopardizing existing revenue streams from ad buyers or distributors,” the analysts’ note stated.
Scott Koondel, the president of CBS Television Distribution, struck a similar tone in a statement announcing the deal. “We will continue to pursue additional nonexclusive distribution partners that are additive to our overall business,” Mr. Koondel said.
The two-year deal gives CBS the option of extending for another two years.
For now, CBS remains the only one of the big four networks that does not share any TV shows with Hulu, the TV Web site that is partly owned by ABC, Fox and NBC. Netflix already has deals with other major networks, but it doesn’t have the rights to as many shows as Hulu does.
The fact that companies like Netflix are bidding for the rights to stream TV shows is viewed as a positive for networks like CBS, so long as the networks do not damage their main source of revenue, the old-fashioned television broadcast.
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