It looks like Netflix (NASDAQ:NFLX) has found a way to soften the blow of losing several popular shows. The video-streaming veteran just signed a massive deal for the worldwide rights to classic comedy show Seinfeld, starting in 2021.

This is a big-ticket deal with lots of zeroes on the price tag. Serenity now, insanity later? Let's think about that for a second.

Red Netflix logo on a dark masonry wall.

Image source: Netflix.

How big is this Netflix deal?

Neither Netflix nor Sony Pictures Television -- the original producer of Seinfeld and owner of the show's publishing rights -- has disclosed the actual price tag for this five-year agreement, but we can certainly make a good guess.

Let's start with the household names Netflix is about to lose. Friends will move to AT&T's (NYSE:T) HBO Max streaming service in 2020 and The Office goes to the freshly christened Peacock service for Comcast (NASDAQ:CMCSA) in 2021. We do know what Comcast and AT&T were willing to pay for these blockbuster syndication deals, and both landed near the $500 million mark for a five-year term.

The Seinfeld deal is likely to outshine Friends and The Office when it comes to pure headline value. For one, neither Peacock nor HBO Max has announced any plans to move beyond the North American market yet, while Netflix is taking its Seinfeld license worldwide. Content creators like to get paid more when their shows reach a larger audience, so global licenses for The Office and Friends would be headline-worthy news with a significant and highly reportable effect on their final price tags.

Moreover, Netflix is breaking new ground with their version of Seinfeld. The show was originally shot on 35-mm film, which allowed it to be converted into high-definition formats for DVD and network syndication releases. Netflix will feature a brand-new 4k conversion from the original film reels, most likely in a 16:9 widescreen format. This isn't some cut-down version of the original video but a fuller frame like the syndication run on TBS. Unless you had access to the original film rolls, the Netflix streams will offer detail never before seen for this classic show.

Seinfeld, Friends, and The Office are all barn-burning audience favorites. Considering the larger market and higher-quality format of Netflix's Seinfeld deal, I'd be surprised if the price tag wasn't significantly higher than each of the megadeals it is replacing. Will it touch the billion-dollar mark? Maybe not, but it's probably close.

Not that there's anything wrong with that.

How Seinfeld fits into Netflix's big picture

OK, so Seinfeld wasn't exactly known for its lush cinematography. It's all about the jokes, after all, and the ultra high-def video format is just a nice little bonus. Likewise, Netflix isn't going for a massive library of well-known but aging TV shows. The company is creating its own high-quality content library, intent on sucking the financial marrow out of every original title for the long haul.

In that light, I think we'll see Netflix dropping its Seinfeld subscription when that deal expires in the year 2026 -- just like the Friends and Office agreements were sent to greener pastures elsewhere after their successful runs on Netflix. These titles are not meant to serve as the core of Netflix's streaming catalog. They are temporary tools for pulling in fans of a particular title, who may find plenty of other reasons to stick around when the original eyeball-magnet show goes away.

That's the fundamental theory behind Netflix's third-party content strategy nowadays. The next few quarters will prove how well the theory stands up in practice as HBO Max, Peacock, and Walt Disney's Disney+ service pull lots of material away from Netflix to power their own platforms.

How to trade Netflix right now

I'm convinced that Netflix will prove the skeptics wrong and continue to grow as the streaming-video market evolves. The pudding should provide lots of proof in Netflix's earnings reports in January and April of 2020 -- and beyond. Until then, you can buy this fantastic stock on the cheap. When Seinfeld arrives in 2021, that's just another push on Netflix's massive flywheel.

The long-term growth story continues, yada, yada, yada.