NET­FLIX MAIN­TAINS HIGH-PRICED RE­LA­TION­SHIP WITH ‘FRIENDS’

Apple Magazine - - Summary -

Net­flix will still be there for fans of the old TV series “Friends,” but main­tain­ing the re­la­tion­ship will come at a steep price.

The video stream­ing ser­vice paid $100 mil­lion to keep show­ing “Friends” in the U.S. through 2019, ac­cord­ing to a re­port in the New York Times . That’s more than triple the $30 mil­lion a year Net­flix had been pay­ing for the long-run­ning TV series about six 20-some­thing friends in New York. The re­port cited two uniden­ti­fied peo­ple with di­rect knowl­edge of Net­flix’s deal with the series’ rights holder, AT&T.

Net­flix tweeted that it will con­tinue show­ing “Friends,” but didn’t dis­close fi­nan­cial de­tails. The Los Gatos, Cal­i­for­nia, com­pany de­clined fur­ther com­ment.

Net­flix’s will­ing­ness to pay so much for a series that ended in 2004 is the lat­est sign of in­ten­si­fy­ing com­pe­ti­tion in video stream­ing.

Be­sides cur­rent ri­vals such as Hulu and Ama­zon, Net­flix is also fac­ing a sig­nif­i­cant threat next year when Walt Dis­ney Co. plans to roll out a video stream­ing ser­vice fea­tur­ing its pop­u­lar movies and TV shows. As part of its move into stream­ing, Dis­ney will be pulling much of the en­ter­tain­ment that it has li­censed to Net­flix for years.

That set­back may have fig­ured into Net­flix’s cal­cu­la­tions about how much “Friends” is worth to its ser­vice. But Net­flix is still spend­ing far more on orig­i­nal pro­gram­ming such as “Stranger Things” and “The Crown” to dis­tin­guish it­self from its ri­vals. The strat­egy has forced Net­flix to take on bil­lions of dol­lars in debt to pay for the pro­gram­ming, but it has helped the com­pany build the world’s largest video stream­ing ser­vice with 137 mil­lion sub­scribers.

AT&T also is plan­ning to of­fer a video stream­ing ser­vice, and there is noth­ing in its deal with Net­flix that pre­vents it from fea­tur­ing “Friends” on that ser­vice be­gin­ning in 2020, ac­cord­ing to the Times.

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