Will New CBS and Warner Bros. Shows Come Exclusively to Netflix? (CBS, NFLX, TWX)
CBS is currently responsible for producing some of the biggest shows on television, such as The Big Bang Theory, How I Met Your Mother, Under The Dome and countless others.
Time Warner may not have had big success with its own network, The WB (or that network's successor, CW), but it has produced some of the biggest shows of all time, including Friends and ER. Warner Bros. Television, Time Warner's TV production arm, also co-produces The Big Bang Theory.
According to Bloomberg, CBS and Warner Bros. might produce original programming for Netflix.
A partnership with Warner Bros. makes sense sense. From its inception, Warner Bros. Television has produced TV series for a wide variety of distributors. Virtually every major TV network has had at least one Warner Bros.-related show. Netflix should be no different.
It would be surprising -- and a bit unusual -- for CBS to develop an original series for Netflix. While the network has an existing relationship with Netflix, CBS has fought against the lure of online video. Instead of bringing hit programs like The Good Wife to Netflix streaming, the network temporarily brings new episodes to CBS.com the day after they premiere. Comcast's (NASDAQ: CMCSA) On Demand service also offers select episodes of CBS shows.
By considering a deal that would allow CBS to develop original programming for Netflix instead of its own network -- which could make millions from a new hit drama or comedy -- CBS must have an awful lot of faith in Netflix.
Netflix may also be offering terms that are too good to resist. The company paid $50 million for just one season of House of Cards. In order to sweeten the deal, Netflix offered $50 million for the second season before the first was released.
If similar terms were offered to CBS, the network could use that money to produce conceptual and risky shows that would typically flop on regular television.
The same could happen on Netflix, but there's no risk -- the network doesn't need ad revenue to pay for the production. All it needs to do is cash the check that Netflix provides.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.