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Disney and Netflix deal shatters the premium TV window


In a first that is groundbreaking enough to rattle the Hollywood sign, Walt Disney Co. and Netflix have entered an agreement to offer audiences movies in the post-theatrical window previously the sole province of premium cable television channels.

The multi-year licensing deal makes Netflix the exclusive U.S. subscription television service for first-run live-action and animated feature films from the Walt Disney Studios, starting in 2016 when Disney’s existing deal with Starz expires. That mouse-shaped corporate umbrella includes movies from Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature.

Direct-to-video titles, those without a theatrical release, will be available on Netflix starting next year. The two companies also signed a separate, non-exclusive deal for older titles that have moved into the catalog – including family favorites like Dumbo, Pocahontas and Alice in Wonderland – to be offered via Netflix even sooner.

News of the agreements caused Netflix shares to jump by about 14 percent, up $10.65 to close Tuesday at $85.65. Liberty Media Corp., the parent of premium channel Starz, slid nearly 5 percent, down $5.49 to close at $105.56. Disney, meanwhile, remained stable at within a cent or three of $49.30. Financial terms of the agreement were not disclosed, but the Los Angeles Times reported its sources said the deal could cost Netflix up to $300 million a year.

Netflix already had rights from independent studios like Relativity Media and DreamWorks Animation, along with an agreement with premium channel Epix that gives it non-exclusive rights to movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer.

Executives representing the two companies issued statements.

Ted Sarandos, chief content officer at Netflix: “Disney and Netflix have shared a long and mutually beneficial relationship and this deal will bring to our subscribers, in the first pay TV window, some of the highest-quality, most imaginative family films being made today. It’s a bold leap forward for Internet television and we are incredibly pleased and proud this iconic family brand is teaming with Netflix to make it happen.”

Janice Marinelli, president, Disney-ABC Domestic Television: “With this cutting-edge agreement, we are thrilled to take our highly valued relationship with Netflix to the next level by adding Disney’s premier films to their programming line-up. Netflix continues to meet the demands of its subscribers in today’s rapidly evolving digital landscape, and we are delighted that they will have much earlier access to our top-quality and entertaining slate,” she continued.

Related links:

Netflix – press release

Netflix blog – Exciting New Relationship with Disney

Reuters – Netflix to get Disney films in TV distribution deal

Los Angeles Times – Netflix buys exclusive rights to Disney movies

Bloomberg – Netflix Gains Disney Streaming Rights in End Run on Cable

The Wrap – Disney, Netflix Sign Exclusive Film Deal