Fox, Netflix expand multichannel digital content distribution deal
Twentieth Century Fox and Netflix Inc. have expanded their non-exclusive digital distribution partnership to push new content across PCs, Macs, televisions and mobile devices.
The agreement adds additional titles from Fox's TV and movie library to Netflix?s menu of content. With both companies ramping up their respective mobile initiatives, the partners are hoping that this deal will boost their multichannel reach.
?This [partnership] recognizes Netflix?s ascension to mobile video prominence?about a year ago they didn?t even have an app in the market, and they were just talking about launching something for the iPad and Windows Phone 7,? said Josh Martin, senior analyst at Strategy Analytics, Newton, MA. ?Mobile video appears to be more of an indirect source of revenue, as Netflix is pursuing multichannel video plays across TV, online and mobile.
?There are not a lot of attempts to leverage free mobile video content supported by advertising, as a lot of content owners don?t want to do that,? he said. ?Will you capture more consumer attention on mobile? Absolutely. Will consumers pay for that content to consume on a single mobile device? Probably not.
?For some folks it works, but single-channel subscription plays have not been a huge success.?
A producer and distributor of motion pictures and TV shows, Fox Filmed Entertainment produces, acquires and distributes motion pictures throughout the world.
With more than 20 million members in the United States and Canada, Netflix claims to be the world?s leading Internet subscription service for streaming movies and TV shows. More than 200 devices that stream from Netflix are available in the U.S.
The devices that enable streaming from Netflix include Microsoft's Xbox 360, Nintendo?s Wii and Sony?s PS3 consoles; Blu-ray disc players, Internet-connected TVs, home-theater systems, digital video recorders and Internet video players; Apple?s iPhone, iPad and iPod touch, as well as Apple TV and Google TV.
Multichannel content distribution strategy
This new multi-year agreement lets Netflix provide its members with access to additional TV series such as the first season of ?Glee? and the first two seasons of ?Sons of Anarchy,? with additional seasons being added annually.
In addition, library series such as ?Ally McBeal? and ?The Wonder Years? are available for streaming for the first time from Netflix.
Fox will also make additional library movies available to Netflix after their premium pay television license periods conclude.
Previously, the streaming agreement with Fox made prior seasons of TV shows available from Netflix such as ?Lie to Me,? ?24,? ?Prison Break,? ?Arrested Development,? ?Buffy The Vampire Slayer? and ?X-Files.?
?The deal between Fox and Netflix recognizes that there are multiple outlets to reach the consumer?these partnerships are rarely exclusive,? Mr. Martin said. ?It?s a recognition that having multiple touch points benefits everyone in the ecosystem.?
Consumers can also get this content on Fox?s Web and mobile properties, as well as Hulu, Hulu Plus and other sites.
Many people that consume mobile video are actively engaged with Netflix, per Strategy Analytics.
While it may not be a differentiator in terms of offering exclusive content, it is a necessity for Netflix to continue to expand its content library and make it accessible across multiple channels.
?If you were not inclined to use Netflix before, a season of Glee may not be enough to influence you,? Mr. Martin said. ?What would probably change the game the most would be Netflix offering the kind of deals that Hulu Plus offers?next-day viewing for a lot of the TV shows across a broad range of devices.
?For example, Netflix has an arrangement with Stars where they get Spartacus a week later,? he said. ?For Hulu Plus, the challenge is to get people to pay $9 a month to access the content on the Hulu site or app when the show may be sitting on your DVR.
?Some content has multiple seasons, some has multiple episodes, but some shows are only there for a limited period of time.?