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Netflix paid $100 million to keep Friends for another year

on December 04, 2018, 8:51pm

Yesterday, the internet had a meltdown when it learned Friends might be leaving Netflix on January 1st. Today, those fears were assuaged when Netflix revealed that the series would stay on the platform through 2019. It turns out, however, that the situation is more complex than it seems, with the question of who gets to stream Friends giving way to a larger conversation about the upcoming streaming wars.

Friends, after all, belongs to AT&T now. And, along with Disney+, probably the most anticipated new streaming platform is WarnerMedia’s in-development three-tiered model. According to a new piece in The New York Times, the question of which platforms survive will rest on a) original content and b) who has access to beloved series like Friends, which was reportedly licensed by Netflix for $100 million. And that’s $100 million just to stream it in 2019. Prior to that, Netflix was paying $30 million a year to stream the show, but, as the piece states, “the new amount reflects the thirst for content in the streaming age.”

Even before the internet exploded, Netflix knew that keeping Friends around was important, as negotiations began a few months ago. But that’s going to become tougher as more streaming platforms launch. AT&T executive John Stankey intoned at a conference last month that companies like Netflix “should expect their libraries are going to get a lot thinner.” And the impact of Disney+ is already being felt, with Netflix’s Marvel quickly drying up with the cancellations of Luke Cage, Iron Fist, and Daredevil.

At a recent investor conference, AT&T’s chief executive, Randall Stephenson, warned that the market can only support two or three on-demand streaming services, including Netflix. He added, “[We] want to be one of the two or three.”