Netflix Rallies on New TV Content Deal
Is Netflix back? The streaming video service is kicking off 2013 with a new deal for premium content from Warner Brothers Television Group, bolstering its position as it faces growing competition from the likes of Amazon, Verizon's Redbox Instant, Hulu Plus and others.
Netflix announced it's made a deal for exclusive streaming rights to eight shows from Warner Brothers airing this season, including "The Following," which stars Kevin Bacon and premieres this month, and J.J. Abrams' "Revolution." The terms of the deal were not disclosed, but it includes "potential future shows" as well.
Why is this a big deal? First, the shows are big—high profile and highly-rated. And second, it was made quickly for shows currently on the air—and not yet on the air.
This comes on the heels of Netflix's mega deal with Disney last month, securing exclusive rights to its films starting in 2016, in the same window that they'd usually appear on cable TV. (Read More: The Future of TV? Netflix Scores Massive Disney Deal.)
That partnership showed that Netflix really is playing on the same field as the cable channels, and Monday's announcement shows it's just as serious about securing premium TV content exclusively as it is film content.
But competition is heating up: HBO is taking steps to make sure its subscribers don't "cut the cord" and opt for Netflix instead of a full cable package.
Netflix's deal with Warner Brothers Television comes just as its Time Warner sister company, HBO, nailed down a 10-year exclusive distribution deal with Universal pictures. This deal means that Universal's movies will be available on "HBO Go," the streaming, on-demand, app version of HBO, but not on Netflix. Universal isn't the only studio to get on board with HBO for an exclusive arrangement, it has similar deals with Fox and others. (Read More: Why Netflix Soared After Coinstar's Redbox Announcement.)
Netflix CEO Reed Hastings has said for years that HBO is his company's biggest competition. That's increasingly proving to be true.
The big question: Will Time Warner ever offer HBO Go as a stand-alone offering? It's unlikely to happen any time soon in the U.S., simply because of the sheer cost of producing the content—and what Time Warner would have to charge. But HBO is currently testing offering HBO Go as a stand-alone subscription in Scandanavia.
And it's not just a two horse race. Amazon continues to ink deals to bolster its streaming library. This past Friday, Amazon struck a deal with A&E networks to offer series from A&E, History, Lifetime and Bio to its Prime Instant Video subscribers. Amazon could scoop up these shows because Netflix dropped them, presumably because the viewer interest did not justify the cost. (Read More: Amazon Invests in Original Shows, Taking on Netflix and TV.)
Amazon's streaming library now features more than 33,000 movies and TV shows. That's about double what Amazon had in March. It's still much smaller than Netflix's massive library, but it shows that Amazon is willing to invest to play ball.
—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin