Don’t expect WarnerMedia to share ‘Friends’ or other hit shows with Netflix, exec says

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Sorry Netflix users, it sounds like “Friends” won’t always be there for you.

Kevin Reilly, the newly appointed head of content for WarnerMedia‘s yet-to-be-launched streaming service, suggested Monday that the popular ’90s sitcom and other Warner Bros.-produced TV favorites will likely leave other streaming services so they can live exclusively on AT&T’s T, +0.54%   WarnerMedia.

“You can expect the crown jewels of Warner will ultimately end up on the new service.”

Kevin Reilly

“Sharing destination assets is not a good model. My belief is they should be exclusive to the service,” Reilly said Monday at the Television Critics Association winter press tour in Pasadena, Calif.

Aside from “Friends,” that includes reruns of the CBS hit “Big Bang Theory” and shows such as “Riverdale,” “The Flash” and “Arrow,” which air on The CW but have found new streaming audiences on Netflix.

In December, Netflix Inc. NFLX, -0.53%   paid a reported $100 million for non-exclusive rights to “Friends,” after fears that the show would leave Netflix caused an online uproar. Netflix acquired rights to “Friends” reruns in 2015, and it has since become a surprise hit for the streaming giant, especially among teens and millennials.

But that $100 million “Friends” deal expires at the end of the year, and Netflix’s deal with Warner’s The CW — in which programs become available on Netflix eight days after each show’s season finale — expires this spring. Reilly’s comments Monday suggest those deals won’t be renewed.

The as-yet-unnamed WarnerMedia streaming service is expected to launch in the fourth quarter of 2019, and its debut offerings will almost certainly include “Friends” and The CW programs. Reilly said Monday the service will not have any original programming at the time it launches, but should at some point in 2020, with an upramp in original content in 2021.

Reilly said HBO will be “core” to the new service, which will also offer children’s programming and movies. Subscription prices have not yet been announced.

WarnerMedia is among a trio of highly anticipated streaming services — along with Walt Disney Co.’s DIS, -1.86%   Disney+ and Apple Inc.’s AAPL, -0.58%   unnamed service — expected to debut this year to challenge Netflix and Inc.’s AMZN, +0.18%   Prime Video. There’s also an ad-supported streaming service from Comcast Corp.’s CMCSA, -1.60%   NBCUniversal, more along the lines of Hulu, due in 2020.

But Reilly said that despite the greater competition, streaming is not a zero-sum game. “We’re not looking to battle with Disney,” he said. “We don’t need to beat Netflix. We just need to be desired as a differentiated option.”

Shares of WarnerMedia parent AT&T are up 4% year to date, but down nearly 18% over the past year. Netflix, meanwhile, is up 29% in 2019, and up nearly 39% over the past 12 months. The S&P 500 SPX, +0.07%   is up 8% and 3.4%, respectively, over those spans.

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