HBO rents one of its most valuable series to Netflix.
Each season of “Sex and the City,” the HBO comedy that aired from 1998 to 2004, will begin streaming on Netflix for the first time in early April, according to three people familiar with the deal.
HBO had a long-standing policy of not licensing its shows to Netflix until last year, when it submitted titles such as “Six Feet Under,” “Insecure,” “Band of Brothers,” “The Pacific” and “Ballers.” Several of these older series quickly jumped into the top 10 most-watched streaming lists after they began appearing on Netflix.
Now “Sex and the City,” which had been licensed to cable networks, will also be offered on Netflix. It was unclear how much Netflix will pay to license the series, one of the most illustrious titles in HBO's library.
Unlike the other series that HBO has licensed to Netflix, “Sex and the City” is part of an ongoing franchise for the company. The “Sex and the City” spinoff series “And Just Like That” airs on the HBO streaming service and is gearing up production for a third season. Executives said last year that “And Just Like That” ranked as one of the most-watched original shows on its Max streaming service. The spinoff will continue to be available only on Max, two of the people said.
For Netflix, this development is further evidence that the streaming service is benefiting from the difficult financial situation faced by many of its rivals. HBO's debt-ridden parent company, Warner Bros. Discovery, will get a cash infusion from the deal, while Netflix racks up more beloved TV series and movies, keeping people subscribing.
“I'm thrilled that studios are more open to licensing again, and I'm thrilled to tell you that we're open for business,” Netflix co-CEO Ted Sarandos said on a quarterly earnings conference call Tuesday.
About five years ago, media companies like Disney and Warner Bros. Discovery pulled many popular TV shows and movies, including “Friends,” “The Office” and “Moana,” from Netflix. Companies wanted to use popular series to induce people to subscribe to their new streaming services, such as Disney+ (which debuted in 2019) and Max (2020).
But several of those companies, still trying to make significant profits in streaming and struggling with plummeting cable revenues, have changed course. Warner Bros. Discovery licensed the “Dune” and “Prometheus” movies in recent months, and Disney is also leasing old movies and series to Netflix.
Many industry executives and analysts have concluded that the return to licensing underscores the diminishing odds other streaming companies face in catching up to Netflix.
One media analyst, Jessica Reif Ehrlich of Bank of America, said last week that the increase in program licensing for Netflix was a “tacit acknowledgment that not all media companies will be able to achieve the global reach and scale of “Netflix in streaming.”
One research firm, MoffettNathanson, told investors this week that Netflix benefited from a surge in licensed content last year, pointing to “Suits,” the former USA Network show that became a surprise streaming hit, and “Young Sheldon,” a Warner Bros. Discovery comedy that was added to Netflix in November.
“Even though this strategy is making Netflix stronger and more efficient, Netflix's competitors appear willing to feed the beast,” the firm said.
Netflix reported Tuesday that it has 260 million subscribers worldwide. Several rival streaming services have only a small fraction of that. And while many companies are losing money on their streaming services, Netflix made more than $5 billion in profits last year.
For years, HBO has sold shows for distribution while retaining them from Netflix. “The Sopranos” appeared on A&E and “Curb Your Enthusiasm” was on TV Land. “Sex and the City” aired on E! Network, TBS and Amazon Prime Video.
“We have to protect the shows that we have that are successful,” HBO President Casey Bloys said at a media event in November. “But I've worked in television long enough that syndication was the pot of gold, that was the brass ring, that meant your show was going to continue and have life after its initial broadcast.”
Bloys noted that several of the titles saw a “surge” in viewership on Max after they began streaming on Netflix. “Sex and the City,” like all HBO shows on Netflix, will also continue to be available on Max.
“I don't think we're going to see newer shows anywhere else until years later, which is the distribution model,” Bloys said in November. “I feel comfortable with it and so far it seems to be working. But again, right now everyone is experimenting, trying to figure out how much is too much.”
