Netflix and Paramount bidding for a potentially lucrative back catalogue mirrors 18th-century publishing deals

Netflix’s plan to buy the Hollywood studio Warner Bros Discovery is over. The streaming giant was eventually outbid by rival company Paramount Skydance, which is willing to pay around US$111 billion (£82.2 billion) for the company.

It’s not a done deal yet. There will be regulatory hoops that Paramount needs to get through.

But after a tense few months of negotiations, Warner Bros, which put itself up for sale last year, said Paramount’s latest bid was “superior” to the one from Netflix, which then refused to raise its offer.

And if things go according to Paramount’s plan, the company will soon become the new owners of a vast library of content. It will own the likes of Casablanca, Friends, Superman, Harry Potter and Game of Thrones. Plus it will have the Sopranos, Sex and the City and Succession.

Media companies like Paramount and Netflix appear to see high quality back catalogues as valuable strategic assets. The theory is that control over legacy content can provide financial stability and a durable competitive advantage.

And it’s a strategy with a long history. Back in the 18th century for example, Longman, the UK’s oldest commercial publishing house, built up its business by acquiring the catalogues of other firms.

Founded by Thomas Longman in 1724, the company steadily and deliberately expanded its portfolio of titles. One of the most famous and lucrative of these was Robinson Crusoe by Daniel Defoe.

In addition to acquiring catalogues from publishers (who were often retiring or leaving the trade) Longman was also a keen trader of shares in consortiums known as “congers”. This was where publishers collaborated to finance new literary works as a way of spreading the risk of potentially costly publishing ventures. In 1755, for example, Longman joined a consortium with five other publishers to produce and publish Samuel Johnson’s Dictionary of the English Language.

By the time Longman reached its centenary in 1824, the firm was regarded as one of the most distinguished publishing houses of the age. Its fortunes were built on the substantial capital generated through the acquisition of lucrative copyrights, a strategy that successive generations continued.

It was the third generation of Longman publishers for example, who, in 1863, acquired the business of John William Parker & Son, publishers of Gray’s Anatomy. First issued in 1858, the work had already become pivotal to medical education, making it a highly valuable addition to Longman’s catalogue. It has never been out of print, and still sells well to medical students and doctors around the world today.

Longman continued to grow, and was considered one of the major players in British publishing in the 19th century. A steady commitment to purchasing reference and instructional works helped cement the firm’s reputation as a leading educational publisher, a position strengthened by its overseas trade and broad catalogue of school textbooks.

Content is always king

This would become their enduring legacy well into the 20th century, as Longman’s reference works came to define standards in English language educational publishing.

As successive generations of Longman had pursued this strategy of acquiring established firms with profitable lists, new media companies entered the market seeking to expand their portfolios. Longman’s reputation and extensive back catalogue eventually made the firm an attractive target for a take over.

In 1968 Longman was acquired by Pearson, bringing an end to a publishing dynasty that had lasted for centuries. And although no longer family-owned, the Longman imprint has endured as a strong brand in educational publishing.

Similarly, by absorbing Warner Bros. Discovery’s extensive archive, Paramount will gain control over a vast catalogue of cultural content, influencing which stories persist and how future entertainment landscapes may be shaped.

The deal, if it happens, demonstrates how legacy assets remain powerful tools for shaping markets and culture. It will also show that for media companies in the 21st century, as with publishing companies 300 years ago, ownership of a profitable back catalogue continues to be a cornerstone of growth and innovation.

Marrisa Joseph works for the University of Reading.