Under a two-year deal, starting with new shows in the 2016-2017, ABC will offer all episodes of Warner Bros. series for that season -- those aired before the most current episode seen on ABC -- through a VOD service, possibly including Hulu.
Earlier this year Time Warner said it was pushing program TV producers -- non-Warner Bros. companies, who sell shows to platforms including Turner Networks channels TNT and TBS -- to allow for full-season "stacking" rights, which “allow for full seasons of shows to be made available for on-demand viewing,” writes Daniel Frankel on FierceCable.
Around that time Time Warner's Warner Bros. sold a new show, “Lucifer,” to the Fox Network, where pay TV subscribers can view the entire first season on demand. It was the the first time Warner Bros. had granted full-season rights to a broadcast network.
Comcast and other cable operators want VOD to grow. Those operators can sell local VOD ad inventory, part of their ad agreements with TV networks/producers -- companies who sell national VOD advertising in those shows.
TV selling executives are bullish on VOD advertising inventory because those commercials can’t be skipped and thus have a higher value for marketers.
Warner Bros. still gets SVOD rights to sell these shows after the season is completed -- as well as early syndication and DVD rights.
There’s a negative ripple effect here on Netflix, possibly lowering the value of the shows they buy from TV studios, according to analysts.
That’s because more consumers will now see TV episodes that previously aired. While almost all networks have deals with Netflix to run a full season of the shows, those agreements typically don’t include the current season of TV series.
Around 60 million cable TV homes have advertising-supported VOD. Netflix, the subscription video on demand service (with no advertising), has around 43 million U.S. subscribers.
Another concern for TV networks and producers: Full-season VOD stacking rights could mean lower ratings for traditional networks reruns of episodes in off-peak viewing periods -- in the summer and around holiday periods. And that could mean less advertising revenue.
ABC and Warner Bros. say they are giving consumers want they want: even more flexibility. But for some operators -- like Netflix -- there will be a cost. Will TV studios/networks be gaining -- while also losing?