Netflix Strikes 30 Million Dollar Deal with DreamWorks for Movies

Posted by at 9:39 am on September 26, 2011

DreamWorks late Sunday revealed that it had struck a deal with Netflix to provide its animated movies. The deal, unofficially estimated by a consensus of NY Times analysts to be worth $30 million, will bring movies like Monsters vs. Aliens or the Shrek series to the streaming service. It’s not evident how long the deal will last other than multiple years, starting in 2013.

The deal is an important milestone for DreamWorks as it comes instead of a deal with HBO. CEO Jeffrey Katzenberg is effectively voting that the Internet video option is both more accessible and more profitable.

On Netflix’s side, the pact would be a form of retaliation for Starz’s decision to pull content from the service next year. Although DreamWorks won’t be an option until a year later, it could put pressure on Starz to come back. The once longstanding Starz deal was Netflix’s key to getting Disney and Sony movies, and having DreamWorks would tell Stars and its partner studios that they might be leaving money on the table by trying to protect legacy TV deals.

An agreement is also following at a crucial moment, just as Netflix is splitting off its DVD business and gambling that it can offer only Internet video. Competitors such as Apple’s iTunes have DreamWorks video but, as pay-per-movie services, haven’t had as much success. Netflix currently has about 64 percent of Internet movie share in the US, according to NPD data.

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