Amazon managers announced today that they have cut an "exclusive" deal for TV shows, such as "Fringe" and "West Wing."
But there are exclusive deals and then there are exclusive deals.
Amazon's licensing agreement with Warner Bros. Television for a menu of shows that also includes "Dark Blue," "Alcatraz," and "The Whole Truth," is exclusive only through the remainder of the summer, according to one of Amazon's representatives. These types of licensing deals have typically covered longer terms, though my film-industry sources say it's not unprecedented. Those sources also say this is where the subscription video-on-demand business is headed.
Slapping an "exclusive" label on content is supposed to help Web video services, such as Netflix, Amazon Prime, Hulu and others, differentiate themselves from competitors. Netflix CEO Reed Hastings has said that the players in this sector would vie for exclusive programming more and more. Both Amazon and Netflix are in various stages of offering original content
It wasn't always this way. Not that long ago Netflix and the other Web services preferred to license on a non-exclusive basis.
But how much exclusive content is worth over specific periods of time is still being hashed out.
Netflix, for one, hasn't shown much interest in licensing programming for shorter terms, according to my sources. How long Netflix prefers to license for isn't exactly known, but six weeks was far too brief for the company. The sources say Netflix bid on these Warner Bros. shows as well, but preferred not to pay a premium for such a short window of exclusivity.
No doubt that the studios and networks benefit from charging extra for exclusives. From their point of view, they deserve to be compensated for losing the opportunity to sell to multiple outlets.
Subscription video on demand is still a new business and the studios, TV networks and Web video services are still trying to figure out what works. One source told me that the cable and pay TV sectors took 25 years to evolve through its many iterations. Subscription video-on-demand companies, said the source, appear to be speeding through the same evolution in about 19 months.