• by Wayne Friedman , Staff Writer, February 7, 2014

HBO and Netflix are pulling in nearly the same yearly revenue -- $4.9 billion and $4.3 billion respectively.  Profits are a different story: $1.8 billion for HBO and $228 million for Netflix.

HBO would probably have loved to have “House of Cards” on its linear network (and on its HBO Go app). But there are now more factors to consider -- like after-market rights on video-on-demand platforms.

Networks are thinking about doing more deals where they sell entire seasons of shows to video-on-demand services.  This includes both subscription VOD services like Netflix, which don’t run advertising, and VOD services from TV providers like Comcast, which do run ads.

Netflix has had the early jump on some of this full-season distribution. But Disney is thinking about giving those ad-supported VOD services more of a chance.  

If the networks keep a hand in the advertising pot for their shows, they can participate in any upside. This includes the coming of “digital advertising insertion” in VOD content, which will allow new commercials to be inserted into programs after they originally air.

This would be good news for networks, since viewers wouldn’t need DVRs, which can skip over commercials. Ad-supported VOD services don’t allow such fast-forwarding.

Viewers would benefit by getting the opportunity for more series binging, so that they can accommodate for an explosion of good shows that don’t fit into their current schedules.

But what does it mean for the future of after-market rerun deals?  For example, ad-supported “Modern Family” reruns have been sold to both USA Network and in broadcast syndication on TV stations.

Some TV executives complain that too much exposure of certain shows hurts all participating parties. What happens when another advertising-supported window is carved out of the after-market distribution system?

Some folks aren’t going to be too happy. Perhaps they need to have more modern family-like TV business values.