This marks the third time Paramount has signed a deal of this type with Netflix. Last year, the streaming giant secured the global distribution rights to Alex Garland's Annihilation, and surprised the world after it released The Cloverfield Paradox right after announcing its existence during the Super Bowl. Beverly Hills Cop is by far and away the biggest franchise the film studio has licensed to Netflix.
Moreover, as Deadline notes, both Annihilation and The Cloverfield Paradox were finished when Netflix came into the picture and helped make them profitable. This time around, the company will have its say on both the script and the director. Notably, it's also shouldering the financial burden of financing the movie, which means if the sequel is a flop, it's on Netflix, not Paramount.
For that reason, the deal makes a lot of sense for Paramount. In its Q2 2018 fiscal quarter, more than half of the company's $741 million revenue came from its agreement to license The Cloverfield Paradox to Netflix. In fact, the movie's surprise success on Netflix was one of the main reasons the film studio was able to turn a modest $9 million profit that quarter.