Seinfeld, Friends, The Office with an ever-increasing wave of new content, why are TV streamers paying hundreds of millions for classic comedies?

Its the the fall of 1998. Netflix has launched with 30 employees and 925 DVD titles available to rent. Amazon has just announced its intention to expand beyond selling books online. And Seinfeld, the hugely popular sitcom about daily life in New York City, has wrapped its ninth and final season on NBC.

At the time, the enduring appeal of Seinfeld seemed so assured that Turner Broadcasting paid a record sum, over $1m per episode, for the right to broadcast reruns on its channel TBS. Its important to realize the scope of the hit that this show is and the broadcast networks inability to continue to generate big, megahit shows like that, said Bill Burke, the then president of TBS, at the time of the deals announcement.

Twenty-one years later, Burkes statement is not quite prophetic networks have produced numerous mega-hits, such as The Big Bang Theory and The Office, since Seinfeld went off the air but not wrong, either. Much has changed (Netflixs business, Amazons products) but Seinfeld, along with its fellow NBC stalwart Friends, remains broadly popular and inordinately valuable; last month, Netflix paid over $500m for the rights to stream all of Seinfelds 180 episodes globally.

The sky-high sum for the show about nothing is one of several giant deals in recent months for library rights to legacy shows, representing a new, cash-laden front on the global streaming wars. In July, WarnerMedia outbid Netflix with $425m for all 10 seasons of Friends, which will stream on its forthcoming service HBO Max in spring 2020. A month earlier, Netflix also lost the rights to The Office, one of its most popular shows, to NBCUniversal, who paid $500m to stream the show for five years on its own forthcoming service, Peacock, in 2021. (Netflix will maintain global rights.) And in a deal said to be pushing $1bn, WarnerMedia has secured both the streaming rights (on HBO Max) and broadcast syndication (on TBS) for The Big Bang Theory, the nerd sitcom that ended its run on CBS last year.

These pricey deals for what is essentially digital reruns have, like the Seinfeld syndication deal two decades ago, raised eyebrows. Why are streaming companies willing to pay so much for shows of nostalgic value? And as numerous companies prepare to launch their own streaming services HBO Max and Peacock, not to mention the forthcoming Apple TV+ why bet on the appeal of legacy TV shows?

Friends still rakes in $1bn a year in syndication revenue on local networks, TBS and Viacom-owned channels such as MTV. Photograph: NBC/NBC via Getty Images

Classic television shows that still resonate in 2019 and beyond with viewers, have global appeal and tons of episodes that is a relatively short list, said Rich Greenfield, an a media analyst with LightShed Partners. It makes sense that theres a handful of shows with this massive appeal. And you have more bidders than ever before, so the result is sky-high pricing.

These deals are, in part, an old story, the updated and more comprehensive version of the syndication bidding wars that have long defined rerun television. The popularity of the most juggernaut sitcoms, in particular Friends and Seinfeld, have not demonstrated a reason to be questioned. Seinfeld, which has gone through three rounds of syndication (a round being the amount of time it takes to air all of a shows episodes on broadcast schedule), has reportedly made over $3bn in rerun deals, with TBS believed to be paying about $350,000 $400,000 per episode in this cycle. Friends still rakes in $1bn a year in syndication revenue on local networks, TBS and Viacom-owned channels such as MTV, where its become a ratings boost with viewers younger than the show itself.

The Big Bang Theory deal with HBO Max, coming right at the end of the shows run, is very akin to what weve seen before in syndication, said Greenfield. I dont think theres anything new about this obviously, these are new platforms, compared to the past, but the concept of key library TV shows having tremendous value has always been true.

The deals have higher values and more bidders than in the past, but the setup is really no different than if you think about 10 years ago, with TV syndication, said Greenfield. Those bidding wars looked just like the bidding wars youre seeing now.

But these shows popularity is newly remarkable given the increasingly niche-driven television market and their popularity with viewers who were too young to watch or not even born when they aired. Friends is arguably one of the hottest shows for Gen Z, loosely defined as the generation born between 1996 and 2010. The 25th anniversary of its premiere last month launched an outpouring of nostalgic content, a lucrative three-night theatrical event, and vociferous online blowback as to whether the show is any good in the first place. Netflix is notoriously tight-lipped on streaming numbers, but according to Nielsen, The Office and Friends were the most-streamed shows on the platform this year.

Gen Z viewers are experiencing The Office and Friends with a kind of urgency that theyve never really had in their lives, says the critic Daniel DAddario. Photograph: NBCUPHOTOBANK / Rex Features

Given the shows hundreds of episodes and low barriers to entry, Gen Z viewers are experiencing The Office and Friends with a kind of urgency and viewing experience that theyve never really had in their lives, said Daniel DAddario, chief TV critic for Variety. He attributes their success to their blend of palatability and humor; as more and more shows are designed for increasingly niche audiences, its comforting to turn on and tune out. These shows are really built to satisfy your viewing theyre big, broad, fun, easygoing. Still well-crafted shows, but shows that are not hard to access. Theyre not, say, Mad Men, the prestige drama whose streaming rights will be shopped by Lionsgate, in a test of how much a library of hour-long, less binge-able episodes can be valued as a tentpole attraction. (Netflix originally bought the streaming rights in 2011 for $1m per episode.)

Thus the eye-popping deals from streaming services on classic sitcoms represent a paradox of the television landscape in 2019: as the glut of Peak TV, spurred by streamers massive budgets for original programs, produces more and more niche content, the more valuable shows with broad appeal become to streaming services. Netflixs Seinfeld deal was especially ironic, wrote the TV critic Alison Herman for the Ringer, because it demonstrated how the company whose maximum-volume production is predicated on the idea of catering to every possible niche is all but admitting it depends on the old-school hit its helped make harder to create than ever.

Which makes the success of these shows behind several different streaming barriers be it HBO Max, Netflix, Hulu or Peacock more of an open question. Show such as Friends and The Office gained legions of viewers after their runs but its difficult to assess the balance of inherent appeal versus accessibility. Right now, Friends is extremely appealing, likely in part because its on Netflix, said DAddario. For many viewers, its already there. When you have to pay a separate bill to the service that has Friends, along with other content too, would that be a deal that youre willing to make?



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