Streaming TV shows online — whether via network websites or services like Hulu and Netflix — represents a major threat to networks that depend on reruns, says Phil Kent, CEO of Turner Broadcasting, which owns networks like TBS and TNT that depends on reruns.
That, he said, is why TBS pulled out of the bidding for reruns of the popular ABC show “Modern Family” after reportedly offering $1 million per episode. The show “was a little too prevalent on the Internet,” according to Kent.
Or maybe Turner simply got outbid: The USA Network snapped up the show for $1.4 million per episode.
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Given numbers like that, it’s hard to conclude that rerun networks are being hurt much. “So far, there are no signs of that happening,” writes Joe Flint of the Los Angeles Times. But, “down the road it is likely to become an issue or at least a negotiating ploy for buyers of reruns.” Kent told Flint in an interview that Turner is even now demanding terms in its negotiations for reruns that would put limits on how many platforms shows will run on.
At the same time, though, he undercut his argument somewhat by insisting that people aren’t giving up their cable-TV service in large numbers in favor of watching shows over the Net. “We just don’t see it,” he said.
Kent also made a speech on Wednesday at the Citigroup Global Entertainment, Media & Telecommunications Conference in which he warned that Netflix, in particular, is enough of a threat that outfits like TBS and TNT could upend the market for reruns. “We tell our suppliers, the studios we buy from: This is going to have a significant impact on what we’ll be willing to pay for programming or even bid at all,” he said. And he noted the hardball tactics that he and other buyers are employing: demanding in negotiations with studios that Netflix be barred from securing reruns that cable networks and others are buying.
“I think there’s a heightened sense across the industry of the importance of freezing those rights, and that’s what you see us from us in the future,” he said, according to PaidContent. “We’re going back to other series on renewals and attempting successfully to retroactively freeze the SVOD rights.”
One irony here is that Turner and Warner Bros. (which owns and sells a lot of reruns) are both owned by Time Warner, which might make for some awkward company picnics this summer.