HBO is renting one of its most valuable series to Netflix.
Every season of the HBO comedy “Sex and the City,” which aired from 1998 to 2004, will begin streaming on Netflix for the first time in early April, according to three people familiar with the deal.
HBO had a long-standing policy of not licensing its shows to Netflix until last year, when it did so, including “Six Feet Under,” “Insecure,” “Band of Brothers,” “The Pacific” and “Ballers.” Had sent the title. Many of these older series quickly rose to the top 10 most-watched streaming lists after appearing on Netflix.
Now “Sex and the City,” which was licensed to the cable network, will also be offered on Netflix. It was unclear how much Netflix would pay to license the series, which is one of the most prolific titles in HBO’s library.
Unlike other series licensed by HBO to Netflix, “Sex and the City” is part of an ongoing franchise for the company. The “Sex and the City” spinoff series, “And Just Like That,” streams on HBO’s streaming service and is preparing for production on a third season. Executives said last year that “And Just Like That” ranked as one of the most-watched original shows on its Max streaming service. The spinoff will be available only on Max, the two people said.
For Netflix, this development is evidence that the streaming service is benefiting from the tight financial situation that many of its rivals are facing. HBO’s parent company, debt-laden Warner Bros. Discovery, will get cash from the deal, while Netflix accumulates more favorite TV series and movies, so people keep subscribing.
“I’m thrilled that the studios are open for licensing again, and I’m thrilled to tell them that we’re open for business,” Netflix co-chief executive Ted Sarandos said in a quarterly earnings call Tuesday.
About five years ago, media companies like Disney and Warner Bros. Discovery pulled several popular TV shows and movies like “Friends,” “The Office” and “Moana” from Netflix. Companies wanted to use popular series to drive people to subscribe to their new streaming services, such as Disney+ (which debuted in 2019) and Max (2020).
But many of those companies, still trying to turn meaningful profits in streaming and struggling with cable revenue, have reversed course. Warner Bros. Discovery has licensed the films “Dune” and “Prometheus” in recent months, and Disney is also renting movies and older series to Netflix.
Many executives and industry analysts have concluded that the return of licensing underscores the low hurdles other streaming companies face in competing with Netflix.
Bank of America’s Jessica Reiff Ehrlich, a media analyst, said last week that the increase in licensing shows to Netflix is a “tacit acknowledgment that not all media companies will be able to achieve Netflix’s global reach and scale in streaming.”
MoffettNathanson, a research firm, told investors this week that Netflix benefited from the growth of licensed content last year, pointing to old USA Network shows “Suits,” which became an unexpected streaming hit, and “Young Sheldon”, Warner Bros. Discovery sitcom that was added to Netflix in November.
“Despite the fact that this strategy is making Netflix stronger and more efficient, Netflix’s competitors appear willing to feed the beast,” the firm said.
Netflix reported Tuesday that it has 260 million subscribers worldwide. Many rival streaming services only have a small fraction of that. And while many companies are losing money from their streaming services, Netflix made a profit of more than $5 billion last year.
HBO has been selling shows into syndication for years, keeping them away from Netflix. “The Sopranos” appeared on A&E, and “Curb Your Enthusiasm” was on TV Land. “Sex and the City” was run by E! Network, TBS and Amazon Prime Video.
“We have to be protective of the shows that we have and that are successful,” HBO president Casey Bloys said at a news media event in November. “But I’ve worked in television for a long time, syndication used to be the pot of gold, it was the brass ring, it meant your show was going to work and have life after the initial run.”
Mr. Bloys noted that many titles on Max saw “surges” in viewership after they began streaming on Netflix. “Sex and the City,” like all HBO shows on Netflix, will remain available on Max.
“I don’t think you’re going to see a more recent show anywhere else until years later, which is the syndication model,” Mr. Bloys said in November. “I am comfortable with it and so far it seems to be working. But still, everyone is just experimenting at this point, trying to figure out how much is too much.”