Netflix eyes Seinfeld SVOD rights


Netflix (NFLX -0.3%) is in talks to purchase the streaming rights for Seinfeld, confirms show co-creator Jerry Seinfeld.

The current syndication deal for the show which has generated $3B of revenue for Time Warner expires in September.

What to watch: Media analysts think the Seinfeld SVOD rights could be quite valuable and a potential Netflix differentiator with it one of the few properties that easily generates repeat viewings. The wildcard is if bidding competition from other streamers pushes the price tag into record territory.

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Comments (16)
  • ChartProphet
    , contributor
    Comments (133) | Send Message
     
    I'd like to know how NFLX plans to pay for this.

     

    One of the most expensive media content, and NFLX already has over $7.7B in streaming content liabilities.
    28 Jul 2014, 10:24 AM Reply Like
  • Aceinmysleeve
    , contributor
    Comments (453) | Send Message
     
    Keep in mind that 7.7B$ is over 5 years and they are currently spending over 3B a year on content. Seinfeld is likely about 20M.
    28 Jul 2014, 03:16 PM Reply Like
  • skibimamex
    , contributor
    Comments (525) | Send Message
     
    "NFLX already has over $7.7B in streaming content liabilities"

     

    Such analytical triteness. Those are actually "commitments" for licensing that haven't yet been consumed yet, over 5 years (as another commentator commented) and represents 2.5 yrs of the content consumption currently being spent annually. Oh did you forget that the $5.4B in revenue run-rate is growing over 20% per annum so those future licensing commitments are serviced by over $30B in revenues over 5 years (even if you peel back to less than 10% CAGR).

     

    By the way, NFLX has currently $1.7B in cash and liquid investments on its balance sheet.

     

    The referenced $3B of cumulative licensing revenues for Seinfeld are for local broadcast and cable over 15 years (3 five-yr licensing cycles). The first 5-yr exclusive licensing cycle for SVOD for a tired and broadly available content (available on many channels), however iconic, should not be more than $200M max (or $40M per year) when you comp to the $180M for the show's first cable network syndication cycle (only $86M during the third 5-yr licensing cycle). just my own opinion. the question is what is the incremental value of on-demand for something that has been over-exposed already; does the incremental value of binge viewing optionality or convenience create sufficient consumer pull to justify paying a premium to keep it out of the hands of others (or do you want your competitors to blow their content budget and crowd out their ability to compete on other product). I frankly prefer that NFLX walk on this unless it is priced pretty cheap per hour -- although it probably can afford to pay the most because of its much larger subscriber base.
    28 Jul 2014, 09:45 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    That $3B has been over many years. NFLX could do a deal where it could continued to be syndicated and streaming on top. Wouldn't be cheap but seems like it could be done.
    28 Jul 2014, 10:38 AM Reply Like
  • bbro
    , contributor
    Comments (11217) | Send Message
     
    Seinfeld syndications are apart of intellectual property products in GDP.....

     

    "Now there is a new category in the quarterly G.D.P. reports called “intellectual property products,” including “entertainment originals.” For example, the production costs of what the B.E.A., a part of the Commerce Department, calls “long-lived TV shows” — ones that provide a steady stream of income, like “Seinfeld” reruns — will for the first time be counted as investment. That’s right — the ultimate show about nothing will now add billions to G.D.P."
    28 Jul 2014, 10:49 AM Reply Like
  • James Sands
    , contributor
    Comments (2637) | Send Message
     
    Back in 2010, it was announced that Seinfeld made $2.7 billion:

     

    http://bit.ly/1o6fxGP

     

    "The numbers indicate that reruns on regular TV have grossed $2.3 billion since 1998."

     

    "Revenues from cable were about $380 million, execs reported."

     

    I think the key thing here is that advertising generates a significant amount of this revenue. Unfortunately, Netflix's downfall will be Hulu's gain. A model like Hulu makes much more sense for a show like Seinfeld. Once Netflix attempts to get more valuable content, they will seriously need to consider an advertising model. If they do not, they will leave so much revenue on the table. This potentially will not be sustainable.

     

    Netflix needs to stick with the cheap stuff and no ads or develop another business segment and iterate their model.
    28 Jul 2014, 10:56 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    The show about people in NY eating pickles and sh!t?
    28 Jul 2014, 11:12 AM Reply Like
  • mobyss
    , contributor
    Comments (2595) | Send Message
     
    I bought the entire series on DVD for about $50 four years ago. If I want to watch a particular episode I pop it in, crack open a Zima, and pretend it's 1997.

     

    Nobody under the age of 30 cares about Seinfeld at all.

     

    What's next - an announcement that Netflix is going to get the streaming rights for "Cheers", "The Cosby Show", and "MASH"?

     

    Lame.
    28 Jul 2014, 01:29 PM Reply Like
  • U2A Ventures
    , contributor
    Comments (335) | Send Message
     
    the show brings a cult-like following similar to Howard Stern and SIRI. I can think of many friends in my circle who would get Netflix who dont have it now simply for Seinfeld on-demand. I imagine many others feel the same way.
    28 Jul 2014, 01:49 PM Reply Like
  • caupachow
    , contributor
    Comments (523) | Send Message
     
    Ah Zima's, bringing back memories. :)
    28 Jul 2014, 02:00 PM Reply Like
  • MEKhoury
    , contributor
    Comments (403) | Send Message
     
    "Nobody under the age of 30 cares about Seinfeld at all."

     

    That's just wrong. For example, Jerry is a frequenter of Reddit AMA's which are very popular -- Reddit has a user demographic range of 18-35.
    28 Jul 2014, 02:01 PM Reply Like
  • SoCalNative+(RIP)
    , contributor
    Comments (651) | Send Message
     
    Close mobyss. Rumor has it NFLX is in talks for exclusive rights to Murphy Brown for $1.4B
    28 Jul 2014, 03:39 PM Reply Like
  • Aceinmysleeve
    , contributor
    Comments (453) | Send Message
     
    Some other article mentioned there had been 3 syndication contracts each around 100M$ and spanning 15 years so this is really only 20M$ a year. It's not gonna move the needle on cost or customer acquisition.

     

    For chrissakes this show is f'n OLD it's not the heavy hitter of it's youth.
    28 Jul 2014, 01:48 PM Reply Like
  • Austin Newsom
    , contributor
    Comments (111) | Send Message
     
    I haven't been this excited since last Festivus!
    28 Jul 2014, 02:01 PM Reply Like
  • bbro
    , contributor
    Comments (11217) | Send Message
     
    Puddy...timeless...

     

    http://bit.ly/1nT7Nw4
    28 Jul 2014, 04:11 PM Reply Like
  • margville
    , contributor
    Comments (44) | Send Message
     
    I just hope poor Jerry gets a good price from the highest bidder- you know how he and LD are hurtin' lmao!
    28 Jul 2014, 11:02 PM Reply Like
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