HBO is leasing 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 stream on Netflix for the first time in early April, according to three people familiar with the deal.
HBO has long had a policy of licensing its shows to Netflix as recently as last year, when the company submitted titles like “Six Feet Under,” “Insecure,” “Band of Brothers,” “The Pacific” and “Ballers.” Several of these older series quickly made it into the top 10 most-watched streaming lists after their release on Netflix.
Now “Sex and the City,” which was previously licensed to cable channels, is also available on Netflix. It wasn't clear how much Netflix will pay to license the series, one of the most famous 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 from the company. The “Sex and the City” spinoff series “And Just Like That” is streaming on the streaming service HBO and is preparing to produce a third season. Executives said last year that “And Just Like That” was among the most-watched original shows on its Max streaming service. The spinoff will remain available only on Max, two of the people said.
For Netflix, the development is further evidence that the streaming service is benefiting from the tense financial situation of many of its competitors. HBO's parent company, heavily indebted Warner Bros. Discovery, will receive a cash infusion from the deal, while Netflix adds more popular TV series and films, boosting its subscriber base.
“I'm pleased that studios are open to licensing again, and I'm pleased to tell them we're open for business,” Netflix co-chief executive Ted Sarandos said in a quarterly earnings call on Tuesday .
About five years ago, media companies like Disney and Warner Bros. Discovery pulled many popular TV shows and movies like “Friends,” “The Office” and “Moana” from Netflix. The companies wanted to use popular series to entice people to subscribe to their new streaming services like Disney+ (which debuted in 2019) and Max (2020).
But some of these companies, still trying to make significant profits from streaming and struggling with declining cable revenues, have reversed course. Warner Bros. Discovery has licensed the films “Dune” and “Prometheus” in recent months, and Disney also leases films and older series to Netflix.
Many executives and industry analysts have concluded that the return to licensing underscores other streaming companies' diminishing chances of catching up with Netflix.
A media analyst, Bank of America's Jessica Reif Ehrlich, said last week that the increase in licensing shows to Netflix was a “tacit admission that not all media companies will be able to match Netflix's global reach and scale in streaming to reach.”
A research firm, MoffettNathanson, told investors this week that Netflix benefited from a surge in licensed content last year, citing “Suits,” the old USA Network show that became an unexpected streaming hit, and “Young Sheldon,” a Warner Bros. series. Discovery sitcom added to Netflix in November.
“Despite the fact that this strategy makes Netflix stronger and more efficient, Netflix's competitors appear ready to feed the beast,” the company said.
Netflix announced Tuesday that it has 260 million subscribers worldwide. Several competing streaming services only have a small fraction of that. And while many companies lose money on their streaming services, Netflix made more than $5 billion in profits last year.
HBO has been selling shows into syndication for years while simultaneously withholding them from Netflix. “The Sopranos” aired on A&E and “Curb Your Enthusiasm” aired on TV Land. “Sex and the City” was broadcast by E! Network, TBS and Amazon Prime Video.
“We need to protect the successful shows we have,” HBO Chairman Casey Bloys said at a media event in November. “But I've worked in television long enough that syndication used to be the pot of gold, that was the brass ring that meant your show would go on and have a life after its initial airing.”
Mr 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 series on Netflix, will continue to be available on Max.
“I don’t think you’ll see newer shows anywhere else until years later, which is the syndication model,” Mr. Bloys said in November. “I feel comfortable with it and so far it seems to be working. But here too, everyone is just experimenting at the moment and trying to find out how much is too much.”