If Netflix (NFLX -0.79%) has a weakness these days, it's that it lacks the kind of Hollywood blockbusters that streaming debutantes like Disney+ (DIS 0.55%) and AT&T's (T -0.27%) HBO Max are bringing directly to home audiences.

HBO Max scored a win with Godzilla vs. Kong in both theaters and at home as the action movie was released simultaneously through both channels. The movie brought in $48.1 million at the domestic box office in its opening five-day weekend, and it was the No. 1 movie on streaming hub Reelgood in the first quarteraccording to data from the company's 2 million users.

Disney is hoping the same strategy will work for it this summer when it releases highly anticipated films like Black Widow and Cruella simultaneously in theaters and on Disney+.

Netflix excels at TV, regularly battling with HBO for the biggest haul at the Emmys, and it even earned the most Oscar nominations this year, a testament to its blossoming film division. But the company lacks the legacy intellectual property that Disney and Warner Bros. own that allows them to make the big-budget blockbusters that have become the most reliable bets in Hollywood in recent years.

Now, Netflix has made a move to change that. 

The Netflix and Sony Pictures logos

Image source: Netflix.

Ponying up for Sony

On Thursday, Netflix announced a multiyear deal with Sony (SONY 0.46%) Pictures Entertainment (SPE) that will give Netflix the first exclusive window in the U.S. for SPE theatrical releases, building on a similar deal with Sony Pictures Animation. Terms of the five-year deal were not disclosed, though it was believed to be in the hundreds of millions of dollars annually, according to The Wall Street Journal, or more than $1 billion over the course of the deal. For Netflix, that represents just a small fraction of its content budget, which should be around $15 billion this year. 

As part of the deal, Netflix will get exclusive access this year to titles including Morbius, Uncharted, Where the Crawdad Sings, and Bullet Train. Most importantly, the deal will include content around Marvel characters like Spider-Man and Venom, as well as Morbius, which Sony owns, in addition to blockbuster franchises like Bad Boys and Jumanji.

The deal also gives Netflix rights to a first look at any streaming-only content Sony makes, and the ability to license titles from Sony's vast movie library.

The "pay-one window" rights that Netflix is getting typically come nine months after a movie releases in theaters and after it's sold through on-demand channels at home. But that schedule may have been accelerated for Netflix.

A mural featuring Netflix characters

A Netflix-themed mural. Image source: Netflix.

Netflix flexes

The Sony deal is a reminder that even as the floodgates have opened in the streaming industry with several new entrants over the past year or two, Netflix still has the advantage here. The company has by far the biggest subscriber and revenue base, giving it much more to spend on content than its rivals. While investors have fawned over the skyrocketing growth of Disney+, that service brought in just $4.03 in monthly average revenue per user, compared to Netflix's at $10.87, or nearly triple that of Disney+ as of their most recent quarters.

In other words, Netflix is still trouncing its top rival in the metrics that matter most, and that means it has the most weight to throw around in the industry. That helped it win the Sony deal, outbidding rivals for what may be the biggest prize left from a major Hollywood studio as Sony has bowed out of the streaming competition, saying it prefers to license its content rather than build its own streaming audience. 

Even as the number of streaming services has greatly expanded over the last year, the economics of streaming haven't changed. You need scale to turn a profit in this business, and that takes time to build. Netflix spent years burning billions in cash to get to where it is today. That gamble paid off for Netflix, but it won't for every debutante.

Netflix's scale gives it a powerful competitive advantage. Having the largest subscriber base gives it the largest self-funded content budget, and makes it the most appealing destination for creators and distributors like Sony that want to get their content in front of the most eyeballs. Much attention has been given to Netflix's originals strategy, but the company always said that it aimed for a 50/50 balance between originals and licensed content, and the Sony deal is a valuable piece in that puzzle.

Netflix won't be able to match Disney when it comes to Marvel content, but the Sony deal helps the entertainment giant shore up one of its few vulnerabilities, and scores a bevy of other valuable Hollywood content as well. That's something worth celebrating for Netflix investors.