Breaking News Bar
posted: 12/4/2012 4:11 PM

Netflix outbids pay-TV for Disney movies

hello
Success - Article sent! close
  • Netflix on Tuesday signed a multiyear accord to carry Walt Disney Co. animated and live-action films, marking the first time a major studio has bypassed traditional cable-TV outlets.

      Netflix on Tuesday signed a multiyear accord to carry Walt Disney Co. animated and live-action films, marking the first time a major studio has bypassed traditional cable-TV outlets.
    ASSOCIATED PRESS

 
Associated Press

SAN FRANCISCO -- Netflix's video subscription service has trumped pay-TV channels and grabbed the rights to show Disney movies shortly after they finish their runs in theaters.

The multiyear licensing agreement announced Tuesday represents a breakthrough for Netflix as it tries to add more recent movies to a popular service that streams video over high-speed Internet connections.

Netflix will have exclusive U.S. rights to offer the first-run movies through its streaming service during the period normally reserved for premium TV network such as HBO, Starz and Showtime. That period starts about seven months after movies leave theaters. The exclusivity does not extend to DVDs, a service Netflix is trying to phase out.

Investors applauded Netflix's coup, lifting the company's stock by $8.86, or nearly 12 percent, to $84.86 in afternoon trading.

It's the first time that one of Hollywood's major studios has sold the coveted rights to Netflix Inc. instead of a premium TV network. DreamWorks Animation SKG Inc. licensed the pay-TV rights to its movies to Netflix last year under a deal that begins in 2013, but those movies don't wield the same box-office appeal as Disney, whose stable includes Pixar Animation and Marvel.

Starz currently holds the rights to The Walt Disney Co.'s movies under a deal that expires in 2015. Beginning in 2016, Netflix will get the movies instead. Direct-to-video movies will come to Netflix sooner, as will older movies such as "Dumbo" and "Alice in Wonderland."

In Tuesday's news release, the Los-Gatos, Calif.-based Netflix didn't disclose how much it is paying Disney.

The Disney deal gives Netflix a measure of revenge against Starz, which had been demanding a price that Netflix refused to pay when their licensing agreement expired earlier this year. The Starz rights had included Disney movies, so losing that access had been seen as a blow to Netflix.

The stock price of Liberty Media Corp., Starz' owner, dropped $7.08, or 6.4 percent, to $103.97 in afternoon trading. Shares of Disney, which is based in Burbank, Calif., lost 3 cents to $49.26.

Share

Interested in reusing this article?

Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.

The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.

Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Name * Company Telephone * E-mail *

Message (optional)

Success - Reprint request sent Click to close
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here