On Sun, Sep 25, 2011 at 6:29 PM, Wesley McGee <[email protected]>wrote:

> Finally, good news for the beleaguered Netflix, they struck a deal with
> Dreamworks Animation, beating out HBO to get first airing of their films.
>
>
> http://www.nytimes.com/2011/09/26/business/media/netflix-secures-streaming-deal-with-dreamworks.html
> ?
>

I would say this is a down payment on exactly the kind of promise (or
gamble) Netflix has been making over the summer. These are the kinds of
content deals Netflix is going to have to make (and they will have to make
more, and more expensive ones than this, going forward) if they are to
thrive. It was in an attempt to give themselves as much cash as possible to
pursue these deals that they did what they did to its customers.

For now, more important than the actual content from DreamWorks, is the vote
of confidence in Netflix and their model that this represents from a major
player like Jeffrey Katzenberg.

A few choice excerpts:

"The Netflix accord, which analysts estimate is worth $30 million per
picture to DreamWorks over an unspecified period of years, is billed by the
companies as the first time a major Hollywood supplier has chosen Web
streaming over pay television.

It is also a bet by Jeffrey Katzenberg, the animation studio’s chief
executive, that consumers in the near future will not distinguish between
the two. “We are really starting to see a long-term road map of where the
industry is headed,” Mr. Katzenberg said in an interview. “This is a
game-changing deal.”

(SNIP) Signaling support for Netflix, John Weiser, president of domestic
distribution for Sony Pictures Television, called it an “important player
and a great customer,” and said the two companies were “actively discussing
producing original programming together.”

Netflix is already spending $100 million to create a series called “House of
Cards" and acquiring the American rights to overseas properties."

-- 
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