We get an awful lot of reader questions about the financial viability of the CW network. Not surprising in light of the fact that their ratings this season among adults 18-49 are down a startling 33% vs. last season.
We posted the press release about the new streaming deal between The CW and Netflix earlier today, But now, with a number of media reports out trumpeting how the deal "makes the CW a profitable enterprise", and that the cost of the entire package could reach $1 billion (although accounts conflict as to whether individual episodes may be worth up to $300,000 or $600,000) it occurs to me that one of several things is happening.
- Netflix is wildly overpaying, in part to try and reverse the massive tide of negative publicity set off by their recent stumbles.
- Netflix isn't wildly overpaying, and all those "up to" and "may be worth" qualifiers in the media are being puffed up and fed to the media writers by the CBS TV Distribution syndication salespeople (who based on past sales history are very persuasive people) and in fact Netflix's financial stake in the deal is very contingent on how many people actually stream the content and they've made sure they'll be getting what they pay for.