Netflix Grabs Distribution Rights to Fox’s Gotham

Deal is struck even before the first episode airs

The era of distributing a new TV series on traditional channels has been turned on its head in a deal that makes Netflix a legitimate second-tier distributor.

Netflix has sealed worldwide distribution rights to the first season of Gotham—the Fox television series based on the Batman franchise—even before the series has begun. The deal opens the gate for similar agreements via rival global streaming services that may be at the forefront of a new wave of primetime programming.

The Netflix/Fox/Warner Brothers Gotham trifecta illustrates that studios financing TV productions are hedging their bets with global multi-channel distribution strategies. That's where Netflix enters the picture. Warner Brothers Worldwide Television Distribution gains access to the company’s entertainment streaming service, which reaches 50 million subscribers in more than 40 countries who collectively watch an estimated one billion hours of TV shows and movies each month.

The head of content development at Netflix labelled the deal a new model for distributing a show that's designed to appeal to both domestic and international audiences.

Warner, Netflix and Fox are betting that viewers will be hooked by what amounts to a prequel of the Batman movies in television series format—even though the Batman movie franchise produced some duds at the box office. Gotham digs deeper into the characters of Commissioner Gordon and Batman’s enemies in a storyline penned by Bruno Heller, the man behind the The Mentalist.

The Gotham distribution rights give Netflix first crack at its existing global footprint, but Warner Brothers retains rights to distribute Gotham in countries where Netflix is absent, such as France and Germany. Another proviso in the deal: Netflix will distribute the first season after it airs on Fox, which won a bidding war for the series. Fox hopes to broadcast the second season simultaneously. Also, the Gotham creators can still shop their show to syndicators and cable channels.

The Fox, WB and Netflix nexus leverages streaming services with traditional television revenues, spreading the risk into a global marketplace that increasingly is embracing subscription-based, video on demand services. The studios also are betting that the crossover audience from Netflix to Fox will boost TV ratings.

It was not immediately clear how much Netflix paid Warners for the distribution rights to Gotham. The company reportedly paid Sony $2 million per episode to distribute the NBC hit TV drama, The Blacklist.