Streaming First, or PayTV Forever? The Global Battle Over Film Rights

As film distributors continue to vertically integrate their pipelines, Pay-1 streaming windows remain one of the most contested and misunderstood phases of film monetization. From Netflix’s split-tier licensing to Universal’s complex global platform strategy, the balance between exclusivity, exposure, and earnings is becoming a delicate, costly act.

With theatrical revenue shrinking and transactional sales squeezed by early streaming on in-house platforms, Pay-1 windows now carry more financial weight—and strategic ambiguity—than ever before.

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The Erosion of Exclusivity in Pay-1 Deals

Historically, Pay-1 windows offered a clear value exchange: premium exclusivity on a major platform in exchange for a predictable licensing fee. Today, those dynamics are increasingly fragmented.

Universal exemplifies this shift. In the U.S., most of its Pay-1 titles now default to Peacock, while in Europe, the studio funnels content into Sky (UK, Italy, Germany) and SkyShowtime (Spain, Poland, Sweden, Netherlands). However, in regions where Universal lacks a robust direct-to-consumer presence, the studio still relies on licensing deals with third parties. Amazon Prime is a major buyer in Canada, Japan, and Brazil. Warner Bros. Discovery’s Max retains exclusive Pay-1 rights across much of Latin America—even though Universal operates Universal+ in the region.

Elsewhere, Universal distributes rights to longstanding pay-TV operators. Canal+ holds French Pay-1 access, protected mainly by regulatory timelines. In South Africa, Universal relies on a direct alliance with Showmax. In Australia, Universal maintains a rare co-exclusive Pay-1 agreement with both Foxtel and Netflix.

This patchwork reflects a highly local calculus: when and where Universal lacks platform penetration, it reverts to revenue-driven licensing. But as SkyShowtime expands, many local broadcasters (Movistar, Viaplay, Canal+ Poland) have been displaced from the Pay-1 cycle—disrupting traditional revenue flows in favor of vertical control.

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Netflix’s Two-Track Approach: Original Films and Strategic Licensing

While Netflix’s original film output remains its stated growth engine—it released 47 English-language Netflix Originals in 2024—the streamer still leans on Pay-1 licensing to supplement its offering, given the lukewarm response to its originals.

In Australia, Netflix shares Universal’s Pay-1 window with Foxtel. It remains the top buyer in South Korea, overtaking OCN, and retains longstanding Pay-1 deals with Sony across the U.S., India, South Africa, and the Netherlands. In Canada, where local streamers often block vertical integration, Netflix continues to aggressively acquire first- and second-window rights to major films.

Although Netflix has significantly reduced its first window acquisitions for scripted series in recent years, it has never fully withdrawn from Pay-1 film licensing. In fact, it’s actively re-engaging in markets where studios have left gaps. And, in many cases, Netflix is also returning for Pay-2 rights, particularly for Oscar-contending titles or films with substantial long-tail SVOD value.

For independent producers and distributors, Netflix’s evolving model may present a renewed opportunity—especially in markets where vertically integrated studio platforms have plateaued or underperformed.

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Discover What Streaming Services Pay to License Films and Shows

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Timing as Strategy: Delays, Exceptions, and Recoupment Math

Release timing is now a core part of distributor monetization strategy, with significant implications for Pay-1 value. In contrast, the pre-lockdown model featured a predictable cadence—three months to Pay-1 after theatrical release—while today’s distributors adopt a title-by-title approach.

Disney remains consistent, delivering most films to Disney+ roughly 90 days after theatrical release. But exceptions are made for blockbusters that fall outside Disney+’s four core brands, which may enjoy longer transactional windows.

Lionsgate, which funnels Pay-1 titles to Starz, often delays the streaming window by up to four months, allowing a longer PVOD/PEST cycle. Sony, with no direct-to-consumer service of its own, maintains a more traditional approach, releasing titles on Netflix about five months after theatrical release—balancing transactional and streaming income without internal conflict.

Meanwhile, Universal is less predictable. While most titles arrive on Peacock within three months, high-profile releases like “Oppenheimer” and “Wicked” took nearly seven months to premiere. This variance suggests that distributors are still calibrating release windows in real time, often favoring longer PVOD exclusivity or theatrical tailwinds.

Paramount has mirrored this hybrid timing strategy. Although most titles are released on Paramount+ after 45-60 days, tentpoles like “Mission Impossible: Dead Reckoning” follow an extended seven-month path.

For licensing professionals, the takeaway is simple: release timing is a trade-off—move too soon and risk undercutting transactional revenue, wait too long, and lose momentum.

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UK as a Test Case: Window Fluidity and Regional Experimentation

Nowhere are these licensing tensions more visible than in the UK. Once a bastion of Pay TV dominance, the region has undergone a rapid reordering of window priorities.

Sky once held firm control of the Pay-1 space. However, the launch of Disney+, Paramount+, and Peacock (via Sky) has fractured this dominance—less than half of Pay-1 titles now debut on Pay TV, down from 80% in 2019.

Meanwhile, Amazon has surged in both Pay-1 and Pay-2 windows. Netflix, once dominant in both, has ceded ground in the first window but still competes aggressively for Pay-2 and Pay-3 rights. Free TV broadcasters are beginning to reassert themselves, acquiring titles in earlier windows than ever before, often just after SVOD premieres.

In this new model, the second and third windows have become more contested—and more valuable—as each release cycle can feed not only audience demand but also franchise awareness and promotional synergy for future entries.

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FilmTake Away: Mastering the Middle Window

Studios, platforms, and buyers are entering a new era of licensing where Pay-1 is no longer a fixed commodity—it’s a strategic lever. Whether used to feed internal services, secure long-term library value, or generate immediate licensing revenue, this middle window has become a barometer of each studio’s broader release philosophy.

Universal’s regional balancing act, Netflix’s dual-track acquisitions, and Disney’s controlled rollouts each demonstrate the critical importance of timing and platform alignment in achieving profitability. As distributors continue to experiment and localize their strategies, the opportunity—and the risk—for third-party buyers has never been higher.

In this fluid environment, the most successful distributors will be those who understand the release logic, track emerging trends in Pay-2 and Pay-3, and capitalize on blind spots where demand still outpaces supply. The Pay-1 window may no longer guarantee exclusivity, but it remains one of the last places where savvy buyers can still find leverage—if they know where to look.

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