Ted Sarandos, Netflix's content chief, has accused the BBC of stifling the potential of homegrown children's shows by holding them back from the US video-on-demand company's UK streaming service for up to five years.
Sarandos said the BBC's restrictive policy towards licensing kids' shows to VOD services such as Netflix in the UK means a potential source of extra money to invest in creating the next great homegrown show, such as Teletubbies or In the Night Garden, is being cut off.
He added that his company has been forced to invest in US kids' shows to offer to its 2 million-plus UK users.
"[The BBC] do some things that are very negative for consumers like they hold back programming from the BBC before it comes to Netflix, up to five years for kids' programming," Sarandos said. "We could pay a lot of money to license that programming, and they could make more programming and make the BBC a better public service product. What is amazing is we have the ability to give an even larger global footprint to BBC content but I don't want to sit behind that big blackout window."
Sarandos added that the "non-competitive" BBC policy is forcing the big-spending Netflix – he controls a $2bn-a-year content budget – to look elsewhere for children's shows to offer to UK subscribers.
"The money I [would] be spending in the UK on homegrown product I have to spend on US imports because they are not making that content, the more attractive programming, available in the current windows [for licensing shows]," he said. "What it is doing is forcing us into licensing content from the US for the UK if we want to have children's programming, creating kids brands that are not homegrown.
"It is a huge mistake – kids' brands are very short life cycles and I'm not willing to pay anything for those things five years later. The best commercial decision possible is to license content while it has a shelf life."
Netflix has invested in kids' shows including Turbo, an animated series about a snail who gains super speed, based on the upcoming DreamWorks film starring Ryan Reynolds and Paul Giamatti.
Sarandos is leading Netflix's charge to disrupt the traditional TV business model of drip feeding series on a weekly basis and staggering their launch in different countries around the world.
Netflix gives consumers entire series of high-profile programmes such as House of Cards and Arrested Development on a global basis.
Sarandos said he believed that BBC Worldwide's strategy of holding back licensing rights in the UK, which it does not do in other markets where Netflix has deals with the corporation, was anti-competitive and threatens the global programming relationship the two companies enjoy.
"The rest of the world doesn't do that," he added. "I do have their programming in US and Latin America without five-year holdback. We are a global product so I want the same windows in the UK as I have in the US, Brazil and the Nordics. The way we renew them they are [increasingly] global deals. I won't have an appetite for staggered windows around the world."
BBC shows Shaun the Sheep, In the Night Garden, Abney and Teal and Octonauts are available on Netflix's US service, but not in the UK.
The BBC downplayed the significance of the five-year delay in licensing content to the VOD market, arguing that Netflix still gets plenty of popular shows eventually such as The Sarah Jane Adventures.
"BBC Worldwide has a longstanding and collaborative relationship with Netflix which we look forward to continuing," said a BBC Worldwide spokesman. "And, while the BBC's windowing policy means that most children's programming remains available to UK licence fee payers through the CBeebies and CBBC channels ahead of any commercial video-on-demand services, we have provided Netflix with such popular series as Charlie & Lola, MI High and The Sarah Jane Adventures."
He added that BBC Worldwide was confident the two companies could continue to do business, despite Sarandos's thinly veiled threat about the need for a single global licensing deal.
"We look forward to offering more high-quality children's content to video-on-demand and subscription video-on-demand suppliers where we can," the spokesman said.
Despite his annoyance at the BBC's children's programme licensing regime for the UK VOD market, Sarandos said he is a big fan of the BBC.
"What I love about BBC is that it is closer to what we are trying to do, they've created a real global brand," he added. "BBC programming is hugely popular in the US, the Nordics. We are having great success with BBC programming everywhere. Call the Midwife is doing extremely well for us in the US. Across the board, comedy dramas, nature docs [all do well]."
Sarandos added that it was the BBC's early involvement in on-demand and streamed programming that has made the UK such an advanced, and competitive, market.
"Here we aren't just competing with the cable infrastructure but also with free [services], with the BBC iPlayer," he says. "There is already an expectation for on-demand, for innovation. We are held to a high [standard] because the thing we do is not that novel. What is great about this market is we didn't have to teach anyone what on-demand meant, or what subscription meant, it is a very well established market. You compete on value proposition and quality of the content."
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