Yesterday, NBC and Netflix announced that the cult classic sitcom, The Office, will be leaving Netflix for NBC’s upcoming streaming platform. The move will take place in January of 2021.
It was revealed today that NBC is paying $100 Million a year for 5 years for the rights to The Office. Why is NBC paying so much for The Office? Simply because The Office will help bring eyeballs to their new streaming service.
If NBC launches their service at $10 a month, they just need 1 million subscribers to join their platform specifically for The Office to not only break even, but also make money. Theoretically, if those subscribers stayed for one year, NBC will see a 20% return on their investment for the year.
Earlier this year, Netflix paid $100 Million for Friends. The same principle applies. In the case for Friends, 12M users said they signed up for Netflix or keep their account for Friends. If that is the case, Netflix made a 44% ROI in one month for Friends (in the interest of full disclosure, I opened a Netflix account exclusively for Friends).
The new battlefield for for streaming is going to be who can get the rights to cult classic shows.