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EXCLUSIVE: Major Premium Networks Passed on Series Sony Sold to Netflix

Stocks in this article: NFLX SNE TWX CBS AMCX

NEW YORK ( TheStreet) -- According to multiple sources close to the situation, at least three major premium networks passed on the original series Sony (SNE) sold to Netflix (NFLX) earlier this week.

Sony approached CBS' (CBS) Showtime Networks, Time Warner's (TWX) Home Box Office and AMC Networks (AMCX) with the as-yet-unnamed psychological thriller from the creators of the defunct FX program Damages, but all three turned down the offer.

But that's only the beginning of the story. The details reinforce why investors as well as observers of the often-euphoric Netflix story the media spins shouldn't believe everything they read.

Across the board, the media -- from financial outlets to television and entertainment reporters -- portray the Netflix/Sony deal as a coup for Netflix. A major get. Here's this Internet-only television network that, unprecedentedly, teams up with a major Hollywood studio so early in its original programming foray.

Netflix's VP of Original Content, Cindy Holland tells us:

We were spellbound after hearing Todd, Glenn and Daniel's pitch, and knew Netflix was the perfect home for this suspenseful family drama that is going to have viewers on the edge of their seats. Their work on 'Damages' was truly ahead of its time and we're proud to be bringing our viewers this upcoming series.

Right, when the ratings suck ( Damages' numbers tanked with each year FX kept the show on the air before it moved to DirecTV (DTV)), just go with the the show was ahead of its time line.

However, it is telling that Sony, after shopping Damages around, had to settle on a deal with DirecTV because that bares a not-so-ironic resemblance to what I understand went down with this new series Netflix decided to order.

I have learned that Sony is nearing the end of a larger deal with the Damages' co-creators. To salvage what has been something other than a success, the studio pitched this new show.

Not only did many of the major players pass on it, but, independent of one another, at least two told me that the pitch they received wasn't very good. In fact, in their eyes, the concept wasn't worthy of a pilot, let alone the 13-episode season Netflix ordered. The 13-episode season Sony was able to secure with Netflix after, for all intents and purposes, everybody else said no.

So when you read the quote from Holland or the following one from Sony Pictures President of Programming Jamie Erlicht remember that when major companies write press releases, the purpose of the press release is to spin everything positive, not mentioning of course, the not-so-flattering behind the scenes buildup.

The guys worked so hard to come up with the right idea after the success of Damages. It took almost a year to fully develop the pitch and their patience paid off with the incredible reaction in the community, especially at Netflix, the perfect home for this show.

That's Erlicht's PR blurb. And it's exactly what Netflix is overpaying for. As one top Hollywood executive put it, "Netflix (overpays for content) with respect to whom they can get a press release picked up."

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