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Analyst Estimate: CBS Deal Cost Netflix $200 Million

Arrangement looks like decent bargain all around

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The combined value of The Andy Griffith Show, Cheers, Frasier, every Star Trek series, The Twilight Zone, and Twin Peaks is in many ways incalculable.  They’re some of the greatest series ever made.  But if anyone was wondering, the cost of yesterday’s Netflix-CBS deal was probably in the neighborhood of $200 million, according to a new estimate.

Peter Kafka wrote this morning, "Barclay’s analyst Anthony DiClemente figures Netflix will pay CBS $200 million over the next two years – ‘similar to other deals struck with broadcasters’ – and most of that money will drop straight to CBS’s bottom line.  For context, note that CBS recorded $283 million in profits last quarter."

So $200 million will represent a nice bump in revenue for CBS.  Meanwhile, the sum shouldn’t come close to bankrupting Netflix, which has a market cap of $11.3 billion right now.

Netflix users also stand to benefit, as well, since they’ll get to see all the shows at no extra charge versus paying well over $1,000 for the DVD sets (even if they went used).

It looks like everyone’s a winner in the short term, then.  Kafka just pointed out, "The flip side, of course, is that the more video you consume over the Web, the more likely you may be stop watching conventional TV.  So long-term, it’s possible that CBS and the other networks are helping to hasten their demise."

Indeed, it’s hard to imagine anyone picking $#*! My Dad Says over Shatner playing Kirk or the much funnier Cheers.

Analyst Estimate: CBS Deal Cost Netflix $200 Million
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