Two TV giants are plotting to bypass Netflix

Reed hastings netflixJD Lasica/Socialmedia.bizNetflix CEO Reed Hastings.

CBS and Time Warner are taking steps that could allow them to extricate their CW network from Netflix’s grasp.

The companies are working to create a standalone streaming service for the CW, which they own jointly, according to Bloomberg’s Lucas Shaw. Currently Netflix streams past seasons of CW shows and Hulu streams current ones, but that could change as the contracts wind down.

The service would potentially be priced at $2 to $4 a month and would offer a “live feed” of shows as well as on-demand watching, according to Bloomberg. Popular CW shows include “Arrow,” “Jane the Virgin,” and “The Flash.”

A standalone CW streaming service could serve as a model for other TV networks who feel they are undercutting their content by licensing it to Netflix. A big chunk of Netflix’s streaming content is old seasons of popular TV shows, and if networks decide to turn off this spigot, it could be damaging for Netflix’s bottom line.

Netflix is trying to get out ahead of this by diving deep into original content. The company will produce a whopping 600 hours of original content in 2016, pumping out 31 shows, as well as movies, documentaries, etc.

While producing original shows is relatively expensive, Netflix executives have characterised it as their best investments going forward, especially since the rights are easier to deal with internationally. Last week, Netflix went live in 130 new countries, which brought its reach to most of the world except China.

Part of CBS and Time Warner’s motivation to bypass Netflix could be flagging number for the CW, which has seen its primetime audience drop 13% this season, according to Bloomberg.

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