Money comes and goes but friends are forever. Except when it’s the other way around. WarnerMedia has snatched back from Netflix the exclusive rights to air the popular sitcom starring Jennifer Aniston. While losing “Friends” might not please Netflix, in financial terms it gets the last laugh.
When Netflix agreed to pay rights-owner Warner Bros some $80 million to globally stream the perky 1990s TV series this year, the surprise was that Reed Hastings’ outfit was willing to write such a hefty check. The last time “Friends” was up for grabs it fetched less than half that amount, according to the New York Times. Netflix’s largesse fit neatly into a wider battle for content in which prices and investment have escalated dramatically. It’s due to pay nearly $9 billion this year in streaming content obligations.
Viewers vindicated that decision by making “Friends” the second-most watched show on Netflix last year, according to Nielsen data. So it’s not surprising WarnerMedia would want to deprive its rival of a successful property. Where it hasn’t even launched its new streaming service HBO Max yet, Netflix already counts nearly 150 million customers and $16 billion in annual revenue. Giving to others what WarnerMedia could keep for itself made little sense.
For the right to show all 236 episodes of “Friends” WarnerMedia is paying $425 million for five years of exclusive streaming, according to the Wall Street Journal, or about $85 million annually. True, HBO Max, WarnerMedia and Warner Bros share the same parent, telecom group AT&T. But that doesn’t mean it will wash straight through. Actors and others involved in producing the show get a cut, for one.
Besides, Netflix has made its mark, by setting a high price with its 2018 deal, and one that has stuck as “Friends” changes hands again. Hastings’ company has lost a show its viewers loved – but done its bit to keep the cost of fighting content wars prohibitively high.