Netflix, Inc. (NASDAQ:NFLX) content chief Ted Sarandos said that BBC Worldwide has suppressed the potential of homegrown children’s shows in the UK by holding back their licenses for up to five years. This restrictive policy has forced the U.S. video-on-demand company to offer US kids’ shows to its more than 2 million British users. Netflix recently reported strong first quarter earnings.
Sarandos said that BBC is cutting off a potential source of extra money that it can use to create the next popular homegrown show like In the Night Garden. Mark Sweney of the Guardian reports that holding back programming from BBC is very negative for consumers. Video-on-demand companies like Netflix, Inc. (NASDAQ:NFLX) get licenses to some programming years later, five years of kids’ programming.
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Netflix Won’t Mind Paying More
Ted Sarandos said that he is ready to pay more to license kids’ shows, and BBC can make more such programming and become a better public service product. He said the non-competitive policy of BBC has forced Netflix, Inc. (NASDAQ:NFLX), which has $2 billion annual content budget, go get children’s shows from other countries for its UK subscribers.
Children’s shows have a short life cycle, so Netflix, Inc. (NASDAQ:NFLX) won’t pay anything for that programming five years later. Sarandos said licensing the programming makes sense before its shelf life is over. BBC doesn’t hold back licenses in other countries where it has a deal with Netflix like North America, South America and the Nordics. But the anti-competitive policy in the UK threatens the relationship the two companies enjoy in the international markets.
BBC Not Worried
BBC downplayed the importance of the five year licensing delay to VOD companies, saying that despite the delay, Netflix, Inc. (NASDAQ:NFLX) still gets many popular shows like The Sarah Jane Adventures. BBC’s idea behind the policy is to ensure that kids’ shows remain available to British licence fee payers through CBBC and CBeebies channels before any commerical video-on-demand services.
Despite the licensing delay issues, Sarandos said that he loves BBC because it’s a real brand and it shows are very popular in the US and the Nordics.
Netflix Inc. (NASDAQ:NFLX) shares were up 1.28 percent to $218.09 at 12:07 PM EDT.