Why Netflix Money May Be Expensive for Viacom
At first blush this seems like the best-case scenario for Viacom and every other Big Media player: Netflix, et al, pay a lot of money for shows the networks have already aired, and that money is almost pure profit.
And in some cases the story gets even better, as Netflix claims that for shows like AMC’s “Mad Men,” the reruns it carries boost the ratings for the show’s new episodes, as binge watchers/catch-up watchers become new fans.
But Bernstein analyst Todd Juenger is convinced that, at least for kids’ programmers, and Viacom in particular, the Netflix deals are bad ones, because they train Netflix subscribers and their kids to watch the shows on the Internet instead of on TV.
This makes intuitive sense to people like me, who have kids who watch a ton of Viacom shows — and almost never watch them on TV. Viacom has said that this isn’t the case, but today Juenger has a new note making the same argument, with new data.
Here’s what happened to ratings for kids’ programming last year, split up by homes that have Netflix and those without. Note that the only case where a network did better in a non-Netflix household was Time Warner’s Cartoon Network, which didn’t have a syndication deal with Netflix until January 2013: