Netflix, Disney agree to movie deal
BY MICHAEL LIEDTKE Associated Press
Wednesday, December 05, 2012
12/05/12 at 6:34 AM
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 Inc. as it tries to add more recent movies to a popular service that streams video over high-speed Internet connections.
Netflix investors applauded the deal, lifting its stock 14 percent as shares rose $10.65 to finish at $86.65 on the Nasdaq Stock Market.
The company did not disclose how much it is paying Disney.
Los-Gatos, Calif.-based 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 networks 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.
The deal marks 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.
Starz currently holds the rights to 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."
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.
Original Print Headline: Netflix agrees to deal with Disney
Netflix Inc., which has its headquarters in Los Gatos, Calif., signed a multiyear licensing agreement with Disney. Bloomberg file