Tuesday, April 23, 2013

Netflix To Allow Viacom Deal To Distribute Nickelodeon, BET And MTV Content To End In May 2013

The entertainment news website C21Media is reporting the Nickelodeon News in the following article that Netflix has announced in a letter to investors on Monday 22nd April 2013 that the on-demand Internet streaming media provider will allow its deal with Viacom expire at the end of May 2013, which will end an agreement that allows the US-based netcaster to distribute shows from Viacom's Nickelodeon, BET and MTV networks. However, talks are underway for Netflix to hang on to select Viacom shows, according to CEO Reed Hastings. "We are in discussions with them about licensing particular shows but have yet to conclude a deal," he wrote. Viacom noted in a separate statement that the company is in talks with "several parties, including Netflix" for distribution of its shows. Netflix also pointed out that they continue to do lots of other business with Viacom around the world, such as their exclusive Pay1 deal for Paramount titles in Canada:
Netflix to allow Viacom deal to end

Netflix will let its deal with Viacom expire at the end of May, ending an agreement that hands the US-based netcaster shows from Nickelodeon, BET and MTV.

Netflix revealed the move in a note to investors on Monday, upon posting improved earnings and subscription numbers for its first quarter.

Talks are underway for Netflix to hang on to some Viacom shows, according to CEO Reed Hastings. “We are in discussions with them about licensing particular shows but have yet to conclude a deal,” he wrote.

Viacom noted in a separate statement it is in talks with “several parties, including Netflix” for distribution of its shows.

Hastings said the subscription VoD service was turning away from the massive, multi-year deals that defined its start-up phase in favour of more selective, exclusive agreements – such as its recent pact with Warner Bros Television for shows including The Following and Revolution.

“Many of our earliest deals were with networks and cable networks and included some shows that have not proven successful,” said Hastings. “By dealing directly with producers of TV shows, we are better positioned to pick just those shows that we believe will work best, and secure rights that may be otherwise blocked by TV carriage and transmission deals.”

Viacom may well be happy to allow the deal to lapse. CEO Philippe Dauman has repeatedly been forced to defend its Netflix pact, which has been blamed for falling ratings at Nickelodeon, though the SpongeBob SquarePants net also has a relatively recent arrangement with Hulu. Hastings said the expiration would not dent the company’s family-friendly package.

“With all the recently added fresh programming from Disney, Cartoon Network, Hasbro’s The Hub and DreamWorks Animation, we have a great kids’ offering,” he wrote.

Netflix on Monday reported a profit of US$3m, compared with a loss of some US$5m for the same period last year. It gained two million subscribers in its home territory – the upswing credited in part to the debut of its exclusive political drama House of Cards in February.

Other originals are being rolled out this spring. The horror series Hemlock Grove debuted on April 19 and will be followed by the return of Arrested Development in May.

Sean Davidson
23-04-2013
©C21Media

TAGS: Financial results, SVoD
SHOWS: Arrested Development, Hemlock Grove, House of Cards
PEOPLE: Reed Hastings
COMPANIES: BET, MTV, Netflix, Nickelodeon, Viacom
COUNTRIES: US
Also, below is a extract from Netflix's note to investors, from The Wall Street Journal's technology news and insights blow, Digits:
As we continue to focus on exclusive and curated content, our willingness to pay for non-exclusive, bulk content deals declines. At the end of May we’ll be allowing our broad Viacom Networks VIAB -1.46% deal for Nickelodeon, BET, and MTV content to expire. We are in discussions with them about licensing particular shows but have yet to conclude a deal. We continue to do lots of other business with Viacom around the world, such as our exclusive Pay1 deal for Paramount titles in Canada.
You can read Netflix's investors note in full here on WSJ's Digits blog.