Netflix on Monday announced a deal with DreamWorks Animation that will bring the studio's feature films exclusively to Netflix's streaming platform.
What this means is that rather than providing its films to HBO or a similar premium pay TV channel, DreamWorks has opted to show its movies on Netflix. The deal will kick off with DreamWorks' 2013 feature film lineup, but certain existing DreamWorks titles will be added to Netflix's Watch Instantly library "over time," including Kung Fu Panda, Madagascar 2, Chicken Run, and Antz.
"Netflix has emerged as an innovative brand with an impressive track record for attracting high-quality content providers to its service and we look forward to making DreamWorks Animation titles available to over 24 million Netflix members in the U.S.," Jeffrey Katzenberg, CEO of DreamWorks Animation, said in a statement. "This arrangement allows us to get more value for our content while giving us a greater degree of flexibility in how we distribute it across multiple platforms in today's evolving digital world."
Ted Sarandos, chief content officer at Netflix, said DreamWorks is "one of the few family entertainment brands that really matters."
Financial terms of the deal were not released, but the New York Times, which first reported the story, said it could be in the $30 million range.
The deal comes several weeks after Starz announced that it would pull its content from Netflix in February amidst a licensing dispute. At the time, Netflix said it would take the money it spent on Starz and invest it in other streaming deals.
But Netflix has also taken heat in recent weeks for changes to its pricing scheme and overall business strategy. First, it announced plans to separate its streaming and DVD-by-mail plans, upping the price for streaming plus one DVD at a time from $9.99 per month to $15.98 per month. CEO Reed Hastings later apologized for the abrupt manner in which that announcement was made, but went on to say that Netflix streaming and DVD rentals would become two separate businesses: Netflix for streaming and Qwikster for DVDs. Users would have to go to two separate Web sites, pay two different bills, and manage two queues. Not surprisingly, not everyone was pleased.
In an interview with the Times, DreamWorks' Katzenberg acknowledged that Netflix could've handled the issue a bit better, "but there are always bumps when you're looking around a corner," he said.
Ultimately, Netflix has not yet ditched its DVD-by-mail business because its streaming library does not yet offer enough current films and TV shows. Deals like the one with DreamWorks help boost the streaming library, but it's still a work in progress.
For more, see As Netflix Becomes Qwikster, Customers Lose.