Netflix (NASDAQ: NFLX) has agreed to license Seinfeld starting in 2021 after rights-holder Sony (NYSE: SNE) Pictures' current contract expires. Starting that year, Netflix's 150 million-plus global subscribers -- maybe more like 200 million by that point -- will be able to stream all 180 episodes of the popular 1990s sitcom from almost anywhere in the world.
Netflix is paying significantly more than the $500 million Comcast's (NASDAQ: CMCSA) NBCUniversal spent on the rights for The Office, or the $425 million AT&T's (NYSE: T) WarnerMedia ponied up for Friends for the same five-year time period, according to the Los Angeles Times. Notably, those rights are for the U.S. only, though.
Still, Netflix is increasingly defined by its slate of original series and films. Paying hundreds of millions for a bunch of old episodes most of its subscribers have already seen seems at odds with that strategy. So, why is Netflix buying up the rights to Seinfeld? I can think of at least three reasons.