With Sony Pictures recently signing an output deal with Netflix and giving Disney access to the subsequent film windows across all Disney platforms, that leaves Universal Pictures the only major studio that has yet to determine a new pact in the Pay 1 window for its titles amid a sea of shifting strategies in the streaming age.
The Pay 1 window refers to a period of time typically six to nine months after a film completes its theatrical run, when it becomes exclusively available to consumers. Studios then license this window to pay-TV or OTT entities as part of an output deal that often covers their entire slate for a set number of years or films from specific divisions and subsidiaries at the studios.
Further output deals for subsequent windows can also be arranged, which is how you see newer films eventually pop up on basic cable or broadcast networks.
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Historically, studios granted Pay 1 licenses for their slates to premium cablers like HBO or Showtime, but in recent years streaming services have become just as viable an option.
With its current Pay 1 deal for Universal titles set to expire at the end of 2021, NBCUniversal still hasn’t committed to either renewing those deals or granting Pay 1 access to its streaming service Peacock, which currently receives new Universal titles once they reach the end of their licensed stay on HBO and HBO Max.
There’s obvious logic in a media company arranging for its own streamer to become the exclusive home for in-house films once the Pay 1 window starts. Disney went so far as to cut its former output deal with Netflix short in order to make sure its newer releases would be available in time for the launch of Disney+.
But it’s also possible that Universal could make more money steering the Pay 1 deal away from its own sister streaming service and keeping those films at a rival like HBO Max. It’s a counterintuitive decision but one many studios make on the licenses for hit catalog TV shows that are more valuable parked outside the company than in-house.
Still, Peacock could really use the help from these films, which include “Jurassic World” and “Minions” sequels set for 2022 as well as two more entries in the “Fast & Furious” franchise, given how the pandemic has handicapped its efforts since launching last July. Not only was the pipeline of planned Peacock originals set back by production delays and shortages, but Peacock was meant to be the exclusive streaming home for the 2020 Olympics, which was postponed to 2021.
HBO Max was already advantaged by Pay 1 licenses for films from 20th Century, Lionsgate’s Summit label and of course Universal, in addition to HBO being the Pay 1 home for Warner Bros. since before the two entities became relatives under Time Warner.
On the contrary, there just doesn’t seem to be a real film push underway at Peacock. To date, its original film content has been a second “Psych” revival and a “Curious George” film, while HBO Max has its own slate of original films and Paramount+ aims to release in-house films on a weekly basis throughout 2022.
Still, Peacock is steadily building sign-ups. Like HBO Max, the actual number of paid subscribers hasn’t been disclosed. But despite its advantageous film library, HBO Max appears to be in the same ballpark as Peacock when it comes to total number of potential sign-ups.
HBO and HBO Max are still set to lose their other Pay 1 studio licenses, with 20th Century unlikely to renew given the streaming empire Disney has been building. Likewise, HBO Max’s day-and-date operation for Warner Bros. films will end by year’s close, so the streamer could be looking to beef up its library again.
Then there’s Netflix. Like Sony, Universal has already been supplying animated titles from the “Despicable Me” universe to the service, and the company still maintains a TV output deal between Dreamworks Animation and the streamer. Gaining the Pay 1 window for Universal titles would grant Netflix an insanely competitive edge to contend with Disney+.
There’s also Apple, which has a less competitive streaming service but deep enough pockets to make it worth Universal’s while by licensing the studio’s Pay 1 window for Apple TV+.
With Lionsgate set to move its Pay 1 window to Starz, and MGM having already set a deal with Paramount to give its Epix cabler a lifeline, there could be serious demand to license Universal’s film slate over the coming years.
If Universal is content with Peacock’s current subscription levels and aims to keep it a TV and sports-dominant operation, generating some serious cash by licensing its Pay 1 window out again is an objectively surer bet in the long term than simply having Peacock mimic the competition.
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May 12, 2021 at 08:00PM
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Future of Film Output Deals Set at Every Studio but Universal Pictures - Variety
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