What are stacking rights?

Answer 1

Stacking rights, or "in-season stacking rights," is the right to stream the full current season of shows. Binge viewing, as explained below, is a desire that has always existed in the general population, but the technology has now caught up to meet the need (i.e. DVD stacks of Lost, or The Sopranos)

* Digital distribution rights have become major point of contention between the networks & the MSO (i.e.CBS-Time Warner Cable retransmission consent fight, viz. more on-demand content from CBS networks, as well as limits on how the Eye, or CBS, sold its content to platforms like Netflix)

* Increase their competitive advantage over the streaming services & to shore up their subscriber base (prevent Cord cutting, allusion to the cable that bring services to the home) . The streaming services are seen as an existential threat to their business model (the streaming services offers much more content at fraction of their price).

* User-friendly ( no need to log-in to the system) & no additional equipment is needed is a strong plus.

Networks:

* stem the hemorrhaging of advertising revenue, as a result of the Digital Video Recording (time-shifting, watch any show beyond its original airdate & time) service offered by the cable companies

* a series can make available all of the episodes from a current season at any point during that season, it's more likely they can induce the catch-up viewing that leads to tune-in for the latest episodes (binge-viewing) . In other words, by not having full access to the current season, unnecessary barriers of entry are created, for a potential loyal following of new viewers.

* VOD viewership, particularly within three days of an episode's premiere, is used by the Nielsen company to gauge audience interest. The ratings in turn, are used by the networks to set advertisement rates for potential media buyers & clients.

* When a network picks up a show, it doesn't own it; it essentially leases the episodes of a season for a predetermined window (usually one year) from the studios that make them. Because the networks are renting and not buying,they usually pay around 60 percent of production costs and make their money back (and,presumably, a profit) by selling ad time.

* The more episodes, the more potential ad revenue, and for a longer period

* condition which the MSO's insisted upon, in exchange for increased carriage and retransmission fees

*FX networks chief John Landgraf believes that stacking allows the network-studio partnership to preserve the more reliable advertiser-supported cashflow as oppose negligible digital dollars provided to the studios by Netflix.

* With neither Amazon nor Hulu yet able to prove an effective streaming competitor, the fear is that Netflix is becoming too much of a monopoly, one building its brand on the back of cable and broadcast network programming it snapped up for a relative pittance (compared to the millions spent to produce and market the shows).

Studios:

* Usually, recouped their production expenses through international sales & rerun syndication. Sells the show to the networks essentially at cost.

* The current business model is in flux, because the cable networks have programmed their schedules with more original content created by their own in-house production companies.

* Quite ambivalent, about the stacking rights issue. Netflix has become a critical financial partner to studios' (and networks') profitability, it's a delicate balance for all parties.

* Netflix & the other streaming services "has become the de facto domestic syndication window" for a number of shows. It is gradually, picking up the slack as a result of losses in its other revenue streams.

* If the stacking rights clause, is exercised by the network/MSO, Netflix penalizes the studios anywhere from 25%-50% of the original offered price/episode.

* Stacking issue, has led to the shutdown of major projects, due to fears of lost revenue from SVOD (i.e. will not grant stacking rights unless it agrees to make up for any lost Netflix revenue).

SVOD:

* Otherwise known as on-line streaming services like Netflix, Amazon, Hulu.

* The program suppliers have found a new, reliable source of income, while the streaming giant gets premium content that it can use to drive subscription growth.

* Many observers argue that the hundreds of millions Netflix is paying to acquire shows from studios is helping to fuel a surge in original scripted programming, since the Netflix money makes taking a chance less risky.

* Much has also been made about how Netflix is good for networks, too: Ratings surges for Breaking Bad, Scandal, and other shows have been linked to late adopters getting hooked via Netflix.

* Stacking dilutes the value of the content they're willing to pay top dollar to put on their own services.

Glossary:

binge-viewing: watching three or more episodes of the same TV show in a single day

carriage fees:The prices networks charge cable providers to carry their programming.

MSO: Multi-System Operator, aka "the Cable Company" , or satellite & fiber-optic cable provider.

Pay-TV distributors: distribute premium channels to its subscribers, the term goes hand-in-hand with MSO, because the MSO not only premium content, but basic cable & over-the-air ( broadcast networks) television as well.

retransmission fees: the prices the broadcast networks charge cable providers to carry their programming

SVOD: Subscription Video on Demand