Netflix, Inc. (NFLX) Jumps After Deal With DreamWorks Animation

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Netflix, Inc. (NFLX) Jumps After Deal With DreamWorks Animation

The video-streaming company, Netflix, Inc. (NASDAQ:NFLX) entered into a deal with DreamWorks Animation SKG Inc (NASDAQ:DWA) over original programming.

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Netflix, Inc. (NFLX) Jumps After Deal With DreamWorks Animation

Terms of the deal

More than 300 hours of new programs are covered under the deal. The programs include shows inspired from DreamWorks Animation SKG Inc (NASDAQ:DWA)’s franchises, new feature films and its Classic Media library. The holdings of classic media include characters like Casper the Friendly Ghost, Lassie, She-Ra and Mr. Magoo.

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As per the statement from the company, the first series will be live in 2014 and will be available in the all the territories covered by Netflix, Inc. (NASDAQ:NFLX). The company has about 27 million subscribers in the United States.

Deal for Netflix

For Netflix, Inc. (NASDAQ:NFLX), the agreement is the biggest to date for original content making it the “home of new original series from the award-winning creators of global box-office hits” including the “Shrek,” “Madagascar,” “Kung Fu Panda” and “How to Train Your Dragon” franchises.

The agreement with the DreamWorks Animation SKG Inc (NASDAQ:DWA) will help Netflix, Inc. (NASDAQ:NFLX) to overcome the absence of Nickelodeon. Earlier this year, Netflix, Inc. (NASDAQ:NFLX) refused to renew the contract with Viacom, Nickelodeon’s corporate parent owing to a dispute over certain terms. As a result, Viacom entered into a deal with Amazon. In 2016, the new release from Disney and Pixar will move from Starz to Netflix, Inc. (NASDAQ:NFLX).

The deal is the latest piece of action in the highly competitive streaming content market. Major firms like Netflix, Inc. (NASDAQ:NFLX), Hulu and Amazon are trying hard to pull the new viewers on the internet, primarily the young ones.

Reed Hastings, CEO has helped the streaming company to regain the top spot in online video, the position that the company lost two years ago owing to pricing and product issues. The original content and exclusive studio deals helped the company to recapture the lost glory.

To overcome the growing threats from competitors like Amazon.com, Inc. (NASDAQ:AMZN), the streaming company previously revived the comedy show “Arrested Development”. The comedy show, in 2006, was canceled by Fox.

The spokesman from DreamWorks Animation SKG Inc (NASDAQ:DWA) declined to provide more information on the agreement. The studio’s chief executive, Jeffrey Katzenberg will reveal his TV strategy in a conference call on Tuesday.

In 2011, Mr. Katzenberg moved away from HBO and chooses Netflix, Inc. (NASDAQ:NFLX) to distribute his films and television. Both the companies announced this year that a new series called “Turbo: F.A.S.T.” would be available in December.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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