For Netflix instant streaming customers, good news: Netflix’s chief content officer Ted Sarandos said that the company will make a big push to try and buy HBO’s pay TV output deal with Warner Bros. before it expires in 2014. It’s not that they’re against the premium cable channel: He added that the company also has plans to try and woo HBO into giving them rerun rights for Netflix’s streaming service.
“Their strategy is exclusivity and Bewkes is a brilliant executive,” Sarandos said to the Hollywood Reporter, referring to Time Warner’s CEO Jeffrey Bewkes who previously compared Netflix to the Albanian Army saying the company wasn’t going to take over the world. “But they (HBO) have assets and we will eventually figure out someplace where we can do business on their content that makes sense for both of us.”
Netflix famously entered the pay TV bidding arena before and has brokered some deals, including one from Relativity Media to show their movies right after they left theaters. In the traditional model, distribution companies like Relativity would sell the rights to a premium cable channel such as HBO or Showtime. Sarandos said that cable channels don’t have to fear Netflix as a competitor because the company does not do two vital things that cable provides – produce original content and distribute live TV such as American Idol or NFL Football. He strongly believes that the company is not the reason for people disconnecting their cable accounts; he said the economy, not people switching to Netflix-only services, is mostly to blame.
Netflix going after pay TV contracts does mean one thing: The price for rights to screen movies right after theatrical showings will probably increase. “We will be an aggressive bidder for that content,” explained Sarandos about the Warner Bros. deal “That will be good for Warner Bros., not so good for HBO.”
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