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Star Trek, CBS, and Netflix: Live Long and Prosper?

July 25th, 2016   ||    by Todd Wasserman

The new Star Trek is coming to CBS and Netflix, illustrating that the media environment of 2016 is a whole new world.

Netflix and CBS may seem like competitors, and they are, but they’re also frequent business partners. CBS CEO Les Moonves recently stated, “Netflix is our friend and our competitor,” notes CNN. Old CBS properties get new life (and a new income stream) on Netflix. Despite that, Netflix vies with CBS for viewers. As such, the relationship is fairly nuanced for CBS. Like other networks, CBS has to weigh its self-interest against Netflix’s relative threat.

In this case, CBS was able to find a solution that met both needs. However, because of the unique appeal of Star Trek, this appears to be more of a one-off deal than a template for future agreements between the two companies.

The Deal

CBS is planning to offer the new series next year. The network will show the premiere episode in January 2017 and then show subsequent episodes on CBS All Access, its streaming network, in the US and Canada. In the other 188 countries, Netflix will be the exclusive provider of the series and new episodes will be added within twenty-four hours of their US premiere. As part of the deal, Netflix will also get all 727 episodes of all the series, including The Original Series, The Next Generation, Deep Space Nine, Voyager, and Enterprise.

The Netflix Angle

For Netflix, the deal reveals the lengths the company needs to go to maintain its reputation for quality TV content. Though the price for access wasn’t disclosed, there was a bidding war with Amazon over the property, notes Hollywood Reporter. Meanwhile, according to Time, on July 18, Netflix reported that it missed its goal of adding subscribers in the second quarter globally, as well as in the United States.

The main reason Netflix missed targets was that it raised prices for its streaming plan from to $7.99 to $9.99 a month for grandfathered subscribers when the price hike took place in 2014 for new subscribers. Mass cancellations ate into Netflix’s growth. That’s a troubling sign since costs for content keep increasing. According to The Wall Street Journal, streaming obligations for the company costed $13.2 billion in the second quarter, up from $10.1 billion a year ago.

The CBS Angle

Meanwhile, CBS is looking to position the $5.99 a month All Access as an attractive option for cord cutters. The longstanding appeal of Star Trek might sway some fans to take the plunge. “There’s about a billion channels out there and because of Star Trek, people will know what All Access is about,” Moonves said last year, explaining his rationale for the move. CBS owner Viacom is betting heavily on the series, whose next chapter, Star Trek Beyond, hits screens on July 22. Paramount, Viacom’s film unit, has also green-lit another installment in the series.

A Win-Win?

While CBS can defray costs via the Netflix deal, Netflix will give its global operations a shot in the arm. Both parties expose themselves to some risk in the process. Netflix adds to its ever-growing content costs and CBS risks low subscription pickups for what might have been a ratings hit on the network.

With the stakes so high, the show is likely to be well-produced and engaging, especially to Trekkies. That’s good news for both parties, which are partners in this venture. As James T. Kirk himself once said, a balance of power is “the trickiest, most difficult, dirtiest game of them all, but the only one that preserves both sides.”

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