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Netflix gets streaming rights to CW's old TV shows

By Michael Liedtke
AP Technology Writer / October 13, 2011

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SAN FRANCISCO—Netflix's Internet video library is adding TV shows from the CW network in an effort to appeal to younger subscribers and help offset the upcoming loss of another contract that supplied customers with other popular entertainment options.

Under a four-year licensing deal announced Thursday, Netflix will have the right to show the previous seasons of TV series that CW airs through the network's 2014-15 programming window. Netflix will retain the streaming rights to some of the series until 2019.

The previous seasons of several current CW shows, including "The Vampire Diaries" and "Gossip Girl," will be available in Netflix's Internet video library Saturday. Other CW series will debut in January.

Financial terms weren't disclosed. The episodes will be available through a Netflix service that streams video over high-speed Internet connections to TVs, computers and a variety of mobile devices.

The agreement with CW's owners CBS Corp. and Time Warner Inc.'s Warner Bros. comes at a low point for Netflix Inc. The company is scrambling to overcome a series of setbacks that have hammered the company's stock price and driven away hordes of subscribers during the past three months.

The trouble began in July when Netflix announced it was raising its prices by as much as 60 percent for U.S. subscribers that wanted to stream video and rents DVDs through the mail. Things got worse last month when Starz Entertainment broke off talks to renew a key Internet streaming deal and Netflix announced plans to spin off its DVD-by-mail service into a separate website called Qwikster.

As part of its damage control, Netflix earlier this week abandoned the Qwikster spin-off. The company, which is based in Los Gatos, Calif., is hoping to minimize the blowback from losing the Starz streaming rights by buying other content that will keep subscribers happy.

Netflix desperately needs to make amends. Its stock price has plummeted by about 60 percent since mid-July and its subscribers have been fleeing. When the company releases its third-quarter earnings on Oct. 24, Netflix is expect to report it ended September with about 24 million U.S. subscribers -- 600,000 fewer than it had in June.

Netflix shares rose $3.39, or 3 percent, to close at $117.01 Thursday.

Since the Starz negotiations collapsed, Netflix has gained the streaming rights to TV shows and movies from AMC Networks Inc., DreamWorks Animation and now the CW network. The movies and TV special from DreamWorks won't be available before Netflix loses the right to stream films from Walt Disney Co.'s studios and other programming when the Startz deal expires early next year.

CW targets younger TV viewers with series that include "Supernatural," "Nikita" and "90210." It's a demographic that Netflix also wants to reach because so many teenagers are growing up watching video on any device with a high-speed Internet connection.

"This is programming for the on-demand generation and we hope this agreement deepens the relationships viewers already have with these powerful entertainment brands," said Ted Sarandos, Netflix's chief content officer.

The CW deal also will make Netflix's Internet video library look even more like a TV rerun service. Netflix says old TV shows account for about 60 percent of the video watched on the streaming service. The company would like to add even more TV programming, but Time Warner so far has staunchly refused to license HBO productions such as "The Sopranos," "The Wire" and "Deadwood" because it views Netflix as a threat to its pay-TV channel.