How did Netflix acquire content rights?

Netflix pioneered the streaming business by acquiring content rights through strategic deals with content holders. In the early days, around 2008-2009, content companies viewed streaming as a minor addition to their primary revenue streams from cable networks. For instance, Netflix's first major content deal was a two-year agreement with the cable network Starz, obtaining extensive TV shows and movies for $25 million. This initial deal was significantly undervalued as content producers did not foresee the burgeoning future of streaming 1.

As Netflix's foresight proved accurate, it later signed an $800 million deal in 2010 with Epix, a joint venture of Paramount, Lionsgate, and MGM, significantly expanding its catalog. This transition marked a shift where Netflix began allocating substantial capital towards acquiring content, setting up dedicated departments to manage these acquisitions 2.

Furthermore, as Netflix's influence grew, it faced protective measures from cable companies, who owned the broadband infrastructure critical for streaming. Despite these challenges, Netflix's strategy to acquire diverse and vast content libraries facilitated its dominance in the streaming sector 2.

Additionally, Netflix's early deals with other major networks, such as NBC Universal, facilitated the rise of on-demand video, shifting the media landscape significantly from scheduled broadcast to anytime, anywhere viewing, boosting subscriber growth even during economic recessions 3.