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CEO: Netflix Could Distribute Original Programming on Discs

23 Jan, 2013 By: Erik Gruenwedel

With Netflix scheduled to launch a slate of original programs in 2013, the subscription video-on-demand pioneer hasn’t ruled out monetizing the content through alternative channels, including retail sellthrough and TV syndication, CEO Reed Hastings told analysts.

In addition to the much-hyped Feb. 1 bow of “House of Cards,” starring Kevin Spacey and Robin Wright, and directed (initial episodes) by David Fincher, Netflix April 19 is launching horror thriller “Hemlock Grove,” from director Eli Roth, and the reboot of former Fox comedy “Arrested Development” in May. Thereafter, it is launching “Orange Is the New Black,” a prison dramedy from “Weeds” creator Jenji Kohan; “Derek” with Ricky Gervais; and, lastly, the sophomore season of “Lilyhammer.”

In a Jan. 23 call to discuss fourth-quarter results, Hastings said he envisions Netflix following a template created by HBO years ago, which he said had great success selling original programming on DVD.

“I’m sure we’ll try some of the same things [and try] to see what makes sense,” Hastings said. “I think it’s something we’ll learn over time.”

The executive said Netflix has so-called “first-window” rights to the current originals. However, Media Rights Capital owns most of the ancillary distribution rights to the much-hyped series “Cards.”

MRC, which is backed by Goldman Sachs and AT&T, among others, bankrolls original TV content distributed by Universal, Sony, Warner Bros., Paramount, Fox, HBO, ABC, CBS, Netflix and Google.

“We’ll try different structures as we go forward, but primarily focus on monetization on our platform,” Hastings said.

Netflix’s willingness to consider packaged media distribution is noteworthy considering it has developed an icy reputation toward physical media in recent years. Indeed, CFO David Wells said the service took extraordinary steps in December to appease the perception by offering free 30-day disc memberships to new or exiting streaming subs.

“We were getting a lot of criticism 12 to 18 months ago [about ignoring discs],” Wells said, adding the December marketing strategy Netflix would be revisited periodically during the year.

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