New Pay-1 Deal, New Record for Netflix and Sony

Pay-1 deals are rarely historic, but the newest deal between Netflix and Sony has reached a never-before-seen dollar value. Our entertainment lawyer from Blake & Wang P.A., Brandon Blake, shares all the news around the new deal and what it may mean for future deals, too.

Brandon Blake

The Pay-1 licensing deal, which will bring Sony’s movies to Netflix viewers’ global screens for the first time, is reported to have settled for over $7B, a first for the industry. This means that Sony’s new releases will head directly to Netflix as soon as their theatrical and home entertainment windows close.

It’s certainly a massive jump from their initial 2021/2 deal, which came with a $2.5B price tag. But what particularly matters is the international component of the new Pay-1 deal. Previously, Sony has taken something of a piecemeal approach to Pay-1 windowing for overseas release, working with a patchwork of partners instead of one primary option.

Sony reserves the right to continue to license specific film and TV library titles. Netflix also retains its Pay-1 rights for some Sony Pictures Entertainment titles in select territories, including Southeast Asia, Germany, and the US.

Sony’s movies regularly feature on Netflix’s most-watched films lists, and we’ve recently seen the two work together on the release of Sony Animation’s KPop Demon Hunters, which was a first-run title for Netflix. It also became Netflix’s most-watched movie, with over a half-billion views - and so, it (technically, at least) became Netflix’s first No. 1 at the box office, too.

Intriguingly, although we’ve known that Sony was in search of an offshore Pay-1 deal for a while, only a Pay-1 deal with Amazon was on the cards, so seeing Netflix join the arena was something of a shock, let alone at this level and capacity.

The deal is set for a gradual rollout, which will start later this year as individual territory rights become available. It is expected to be in full force by early 2029 and will continue through 2032.

With Netflix also still the forerunner for Warner Bros’ motion picture and TV arms, alongside HBO Max, this deal could become a way to prove to regulatory bodies that the streamer is still actively licensing products from third parties.

Netflix additionally retains its deal with Universal, commencing in 2027, which will add DreamWorks Animation and Illumination titles to the streamer alongside certain live-action titles post-Peacock and premium VOD availability. Titles will head to the service within 8 months of theatrical release, for a 10-month exclusive window.

All in all, staying independent and without its own streaming service may be a rather unique model in the current landscape, but it is paying off well for Sony’s releases. While we wait for the questions currently surrounding the Warner Bros. deal to clarify, it seems that Netflix isn’t letting it hold them back. It will be interesting to see what else grows from Netflix and Sony’s expanded partnership.