[6 April 2011]
Los Angeles Times (MCT)
LOS ANGELES — Netflix, in a sign of its growing importance in television, will become Don Draper’s second home.
The home entertainment company has bought the rerun rights to the TV series “Mad Men,” making its online streaming service the next place to watch episodes after the show’s initial airing on cable network AMC.
Netflix will pay “Mad Men” producer Lionsgate between $750,000 and $900,000 per episode, according to people familiar with the situation.
The first-of-its-kind deal means that reruns for the critically acclaimed program won’t air on a broadcast or cable network, as typically is the case. It’s the first time that Netflix has bought syndication rights to a currently airing program for its online streaming service.
Though the agreement is a sign of Netflix’s growing influence in the television industry, it also underscores the tough hurdles Lionsgate might have faced trying to sell the show to a traditional network. Serialized dramas such as “Mad Men” do not perform well in reruns, negatively impacting their value.
For example, A&E shelled out $2.6 million per episode for reruns of HBO’s mob drama “The Sopranos” and the show performed poorly. Reruns of ABC’s “Lost” and Fox’s “24” also did not deliver good returns for various networks.
A big hit with critics, “Mad Men” has always had a modest audience compared with other cable shows such as TNT’s “The Closer” and USA’s “Burn Notice.” Last season, it averaged just under 3.3 million viewers per episode.
The show, however, is expensive to produce. AMC pays close to $3 million an episode for “Mad Men.” Lionsgate receives an additional $2 million from foreign rights and DVD sales.
The first four 13-episode seasons of “Mad Men” will debut on Netflix Instant on July 27. Future episodes will not become available on Netflix’s streaming service, which many people access on their televisions, until seasons are complete. “Mad Men” creator Matt Weiner has said he expects to produce three more seasons.
About half of the video streamed by Netflix is now television shows. The Internet service has proved particularly popular for dramas, as many people choose to “marathon” several episodes in a row of programs with intricate, continuing plotlines like “Mad Men.”