In what is believed to be the first SVOD deal for a broadcast series made before its premiere, Netflix has reached an agreement with Warner Bros. Worldwide Television Distribution for the upcoming Fox drama series Gotham. Under the pact, Netflix will become the exclusive subscription video on demand home of the Warner Bros. TV-produced Batman prequel in the U.S. as well as in each of the territories in which the streaming network operates and select other territories in which it plans to launch services. Each season of the series will be available to Netflix members following their broadcast run. In the U.S. that is expected to be in September 2015, coinciding with the potential Season 2 premiere. Noone is discussing figures, but I hear the deal is worth about $1.75 million an episode in the U.S..
The unprecedented deal was put in motion shortly after the Gotham pilot had a great reception at the L.A. international screenings in May. I hear Netflix approached WBWTD about a pact that would cover multiple territories. That was a very tricky proposition as WBWTD has different agreements in each country, with the terms of the output deals, including holdback rights against SVOD releases, varying from territory to territory. After laying the groundwork country by country, the two sides have been able to clear the show in all Netflix markets around the world. The pact builds on Warner Bros.’ existing relationship with Netflix, which includes another precedent-setting pact that covers all CW series. The Gotham deals comes on the heels of Netflix nabbing Sony TV-produced hit NBC drama The Blacklist for $2 million an episode. Sony also made a deal similar to the Gotham one for its upcoming Breaking Bad prequel, Better Call Saul, which airs on cable on AMC. In it, Netflix gets first window in territories outside of the U.S.
Premiering on September 22 on Fox in the US, Gotham draws on the origin story of Batman, taking place in Gotham City as young Detective (and future Commissioner) James Gordon and the recently orphaned Bruce Wayne meet in the troubled days before the arrival of the Dark Knight. The series follows Gordon’s rise from rookie detective to Police Commissioner as he navigates the layers of corruption that secretly rule Gotham City. The cast includes Ben McKenzie, Donal Logue, Jada Pinkett Smith and Sean Pertwee. “Gotham is the most anticipated new series of the fall season and we are thrilled to offer it to our members around the world,” said Ted Sarandos, Chief Content Officer at Netflix. “The Batman origin story is sure to have massive global appeal so it is fitting that, along with Warner Television, we have created a new model for distributing a show that international and domestic audiences will love.”
While serialized fare like Gotham works best on streaming services like Netflix, WBWTD has the right to sell the series in linear syndication down the road. “In this era of new business models and expanding windows, this is an unprecedented deal for our company and our industry,” WBWTD president Jeffrey R. Schlesinger said. “While we typically license our programming country by country, we have licensed this very special series to Netflix on a multi-territory basis. Netflix is a perfect home for Gotham following its initial broadcast in each respective country, giving Netflix subscribers the opportunity to catch-up prior to the new season, whether they’re already fans or discovering it for the first time.”
SVOD services have become a solid new revenue stream for TV studios, allowing for additional windowing, especially on serialized dramas once deemed of little off-network value. However, those SVOD providers are also pretty aggressive. They require to stream seasons shortly after they air vs. years later, as was once the case, and are known to even jump ahead of the line and get the first window over a traditional broadcaster/cable network in some territories. Meanwhile, traditional networks, especially on the cable side, are looking more and more to retain SVOD rights to their shows. That makes for a tricky balancing act as TV studios try to maximize revenue by pursuing new windows while also trying to keep the traditional windows vibrant and healthy, which is in the best interest of the shows they produce.