HBO is renting out one of its most valuable series to Netflix.
Every season of “Sex and the City,” the HBO comedy that aired from 1998 to 2004, will begin streaming on Netflix for the first time in early April, according to three people familiar with the deal.
HBO had a longstanding policy of not licensing its shows to Netflix until last year, when it sent over titles including “Six Feet Under,” “Insecure,” “Band of Brothers,” “The Pacific” and “Ballers.” Several of these older series quickly leaped into Top 10 most-watched streaming lists after they began appearing on Netflix.
Now “Sex and the City,” which had been licensed to cable networks, will be offered on Netflix as well. It was not clear how much Netflix will pay to license the series, one of the most illustrious titles in HBO’s library.
Unlike the other series HBO has licensed to Netflix, “Sex and the City” is part of an ongoing franchise for the company. The “Sex and the City” spinoff series, “And Just Like That,” streams on HBO’s streaming service and is preparing production for a third season. Executives said last year that “And Just Like That” ranked as one of the most watched original shows on its Max streaming service. The spinoff will remain available only on Max, two of the people said.
For Netflix, the development is further evidence that the streaming service is benefiting from the tight financial situation that many of its rivals are confronting. HBO’s parent company, the debt-ridden Warner Bros. Discovery, will get an infusion of cash from the deal, while Netflix accumulates more beloved TV series and movies, which keeps people subscribing.
“I am thrilled that the studios are more open to licensing again, and I am thrilled to tell them we are open for business,” Ted Sarandos, Netflix’s co-chief executive, said in a quarterly earnings call on Tuesday.
About five years ago, media companies like Disney and Warner Bros. Discovery pulled many popular TV shows and movies, like “Friends,” “The Office” and “Moana,” from Netflix. The companies wanted to use popular series to induce people to subscribe to their new streaming services, like Disney+ (which debuted in 2019) and Max (2020).
But several of those companies, still trying to make meaningful profits in streaming and struggling with nose-diving cable revenues, have reversed course. Warner Bros. Discovery has licensed the movies “Dune” and “Prometheus” in recent months, and Disney is renting out movies and older series to Netflix as well.
Many executives and industry analysts have concluded that the return to licensing underscores the diminishing odds other streaming companies face in catching up with Netflix.
One media analyst, Jessica Reif Ehrlich of Bank of America, said last week that the increase in licensing shows to Netflix was a “tacit acknowledgment that not all media companies will be able to achieve Netflix’s global reach and scale in streaming.”
A research firm, MoffettNathanson, told investors this week that Netflix benefited from a surge of licensed content last year, pointing to “Suits,” the old USA Network show that became an unexpected streaming hit, and “Young Sheldon,” a Warner Bros. Discovery sitcom that was added to Netflix in November.
“Despite the fact that this strategy is making Netflix stronger and more efficient, Netflix’s competitors appear willing to feed the beast,” the firm said.
Netflix reported on Tuesday it has 260 million subscribers worldwide. Several rival streaming services have only a small fraction of that. And while many companies are losing money from their streaming services, Netflix made more than $5 billion in profit last year.
HBO has for years sold shows into syndication while holding them back from Netflix. “The Sopranos” appeared on A&E, and “Curb Your Enthusiasm” was on TV Land. “Sex and the City” was carried by the E! Network, TBS and Amazon Prime Video.
“We have to be protective of the shows that we have that are successful,” HBO’s chairman, Casey Bloys, said at a news media event in November. “But I’ve worked in television long enough that syndication used to be the pot of gold, that was the brass ring, that meant that your show was going to go on and have a life after its initial run.”
Mr. Bloys noted that several of the titles saw an “uptick” in viewership on Max after they began streaming on Netflix. “Sex and the City,” like all the HBO shows on Netflix, will also continue to be available on Max.
“I don’t think you’re going to see more recent shows anywhere else until years later, which is the syndication model,” Mr. Bloys said in November. “I am comfortable with it, and so far, it seems to be working. But again, everybody’s just experimenting at this point, trying to figure out how much is too much.”