Netflix, Dreamworks Announce Streaming Deal
Netflix Inc. and DreamWorks Animation has reached a multi-year streaming deal that gives Netflix exclusive rights to run DreamWorks feature films and television specials.
The Netflix deal which analysts estimate is worth $30 million will allow Netflix to start streaming DreamWorks movies and shows on television, computer tablets and mobile phones starting in 2013. It is the first time a major Hollywood supplier has chosen a web streaming service over pay television.
Jeffrey Katzenberg, the animation studio's chief executive believes that this is the next step for the entertainment industry.
"We are really starting to see a long-term road map of where the industry is headed," Katzenberg said in an interview. "This is a game-changing deal."
The deal comes just as Netflix is going through a rough time with competitors like Apple, Amazon and Vudu nipping at the streaming site's heels. In July the company caused uproar of protests from its customers when it decided to separate its DVD rental service form its online streaming unit. At the same time its deal with pay-TV channel Starz ended along with the right to stream content from Sony and Walt Disney, Co.
The agreement gives Netflix new content to stream to its customers. Janney Montgomery Scott analyst Tony Wible said the DreamWorks deal is the right move for Netflix to regain customer loyalty.
"Netflix is in the penalty box and needs DreamWorks more than ever," Wible said. "They need the positive spin that they're investing in content, and they want to make the claim they can bypass pay-TV networks and go to the root source."
Netflix will start streaming Dreamworks films starting in 2013. It will have access to such hits like "Kung Fu Panda" and "Shrek". Dreamworks is planning to release three films in 2013: "The Croods," a prehistoric comedy; "Turbo" about a garden snail; and "Peabody and Sherman" a story based on "Rocky and Bullwinkle" characters.