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Report: Netflix Playing Hardball for A+E Content?

17 Sep, 2012 By: Erik Gruenwedel

Perhaps taking a page from the playbook of cable and satellite TV operators unwilling to pay escalating retransmission fees with television broadcasters, Netflix reportedly has told A+E Networks it is not interested in about 40 shows in ongoing renewal talks of a license agreement.

A+E, which is owned by The Walt Disney Co. and Hearst Corp., currently licenses to Netflix subscription video-on-demand subscribers episodes of “Storage Wars,” “Ice Road Truckers” and “Pawn Stars,” among others, in addition to content from the History channel.

Netflix is said to be dropping about 800 hours of A+E programming it deems unpopular with subscribers, according to a report in Variety.

“While we do not comment on our deals and partnerships, expect some of the A+E and History programming to drop and some to remain on Netflix,” the SVOD service told the trade publication in a statement.

A source familiar with situation downplayed the existence of a renewal deadline or pending deal between Netflix and A+E.

“This is not news,” the source said.

Los Gatos, Calif.-based Netflix in recent years has transformed its image from that of a cord-cutter to SVOD cash cow — allocating hundreds of millions of dollars in license fees to content holders. It also is attempting to shore up a portfolio of TV-centric content with exclusives not available on other platforms or in syndication.

Chief content officer Ted Sarandos, speaking at an investor event Sept. 13 in Beverly Hills, Calif., said Netflix — whenever possible — tries to secure access to select programming most popular with its streaming subs and not readily available elsewhere.

In addition to eclectic programming, Netflix has become a catalyst for attracting new viewers to current TV hits through streaming access to previous seasons of shows, according to Sarandos. He said streaming episodes from the first seasons of “Mad Men” and “Breaking Bad,” have been some of the most-watched programming.

The CCO said the quality of TV programming has improved exponentially in recent year — calling the trend a “cinemazation of television,” which he said underscores the reality that the best content available today originates on TV, not on the big screen. The executive said that while original content dominates viewing among subs, there is no one program that commands the most eyeballs.

Netflix CFO David Wells could provide further color on the situation during a scheduled Goldman Sachs Communacopia Conference presentation Sept. 21 in New York.

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