March 19, 2011 in Business

Netflix buys rights to its first TV series

Agreement for ‘House of Cards’ covers 26 episodes
Associated Press
 
Streaming push

Netflix has spent more than $400 million on streaming rights in the past year in an effort to expand the online library’s breadth and quality. Netflix wants to get more subscribers to watch video over high-speed Internet connections because it lowers its expenses on postage and handling. There are more than 20,000 titles in the streaming library, but most are older movies and previously shown TV series.

LOS GATOS, Calif. – Netflix Inc.’s Internet video streaming service will be the only place to watch an upcoming TV series with a high-powered pedigree that includes Academy Award-winning actor Kevin Spacey and the director of an Oscar-nominated film about Facebook.

The deal announced Friday illustrates Netflix’s growing clout in Hollywood as its mines revenue from its 20 million subscribers to create new home entertainment options. In this instance, Netflix will be showing a series that won’t have a scheduled broadcast time. Episodes could be released in bunches instead of just one per week.

“It’s a show people will be able to discover over time,” Ted Sarandos, Netflix’s chief content officer, said in a Friday interview. “It doesn’t have to happen over the first week, first month or even the first year of the show.”

Netflix didn’t disclose how much it is paying Media Rights Capital, the studio behind “House of Cards.” The agreement covers 26 hourlong episodes, an unusually large commitment for a series that hasn’t even entered production. The series will debut on Netflix late next year.

“House of Cards” is based on a novel about British politics during the 20-year regime of former Prime Minister Margaret Thatcher.

This will mark the first time that Netflix owns the exclusive rights to an episodic series, an advantage that has worked well for pay-TV channels such as Time Warner Inc.’s HBO and CBS Inc.’s Showtime. The deal gives Netflix the flexibility of releasing the series on DVD for subscribers who prefer getting discs mailed to them, but the company primarily wanted the series for its video streaming library.

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