Netflix to get Disney films in TV distribution deal

Malanthius · 12-04-2012, 09:31 PM

http://tv.yahoo.com/news/netflix-dis...--finance.html

(Reuters) - Walt Disney gave a much needed boost to Netflix, becoming the first major Hollywood studio to use the video service to bypass premium channels like HBO that traditionally controlled the delivery of movies to TV subscribers.

News of the deal, which enables Netflix to stream Disney's first-run movies to its subscribers, boosted Netflix shares by 14 percent.

Liberty Media Corp, whose Starz group now distributes Disney movies on TV, fell almost 5 percent.

Investors saw the Netflix-Disney deal as an important endorsement of the DVD rental and streaming service, which has been struggling with slowing subscriber growth and higher costs for content distribution.

Disney movies will be available for streaming on Netflix starting in 2016, after its current deal with Liberty Media's pay-TV channel Starz expires. The deal is for both new Disney movies and library content such as "Dumbo" and "Alice in Wonderland."

"An exclusive deal with Disney differentiates the Netflix content from Hulu Plus and Amazon Instant Video," said Anthony DiClemente, an analyst with Barclays Capital.

But some analysts worried that Netflix paid too much to get Disney's movies. Tony Wible, an analyst with Janney Montgomery Scott, estimated in a report that Netflix paid more than $350 million a year for Disney's movies and said "we would not be surprised if (Netflix) would need to raise capital".

By comparison, HBO agreed to pay an estimated $200 million annually in its so-called "output," or movie licensing deal, with 20th Century Fox earlier this year, according to the Los Angeles Times.

The deal gives Netflix streaming rights to movies from Disney's live-action and animation studios, including those from Pixar, Marvel, and the recently acquired Lucasfilm. On October 30, Disney announced a $4 billion deal to purchase the famed studio founded by George Lucas, which will now make new episodes in the blockbuster "Star Wars" series.

"This deal brings to our subscribers some of the highest quality, most imaginative family films being made today," Ted Sarandos, Netflix's chief content officer, said in a statement. "It's a leap forward for Internet television."

DREAMWORKS EXCLUDED

Movies from Steven Spielberg's DreamWorks Studios are not included in the deal, as that studio distributes its movies through CBS's Showtime on TV. Disney recently signed a deal to distribute DreamWorks' films theatrically after the studio's deal with Viacom's Paramount Pictures expired.

The deal allows Netflix to stream Disney movies beginning seven to nine months after they appear in theaters, as Starz does now under Disney's prior agreement. The deal does not cover DVD rentals of Disney movies.

Disney said in November that it would shut down its own video streaming service, Disney Movies Online, which had failed to catch on with users. A message on the 'Disney Movies Online' website said it would shut down on December 31.

Netflix, which started its streaming business with mostly older films, has been moving to add more original programming and produces TV shows such as "Lilyhammer," which stars "Sopranos" actor Steven Van Zandt as an American gangster who starts a new life in Norway. The company also struck a high-profile deal with actor Kevin Spacey for "House of Cards."

The Disney pact follows similar deals Netflix has inked for new films with smaller studios, including Relativity Media, The Weinstein company and DreamWorks Animation.

The agreements have saddled Netflix with nearly $5 billion in contractual commitments over the next three years for deals its made for streaming content, the company said in a recent quarterly earnings report.

Netflix's struggles over the last year, which have included missed subscriber guidance, an ill-fated attempt to split the DVD and streaming operations, and a swooning stock price, recently attracted the attention of billionaire activist investor Carl Icahn.

Icahn disclosed in regulatory filings on October 31 that he had amassed a nearly 10 percent stake in the video company and suggested it should pursue a sale. Netflix responded by adopting a poison pill defense.

Losing Disney's movies means Starz is left with only Sony Pictures for film content. The pay-TV channel cast the ending of its agreement with Disney as its decision, saying it preferred to use the money for original programming creation.

Liberty Media's shares will "rebound," said Vijay Jayant, an analyst with International Strategy and Investment Group.

"We believe it was Starz' decision to remain prudent and walk away from the bidding for Disney content," ISI said in a report, estimating that it might have cost Starz $400 million to keep the movies.

Without that expense, Starz can step up its production of original series such as "Spartacus" and "Magic City," which ISI said have become more valuable to cable operators anyway.

Netflix shares jumped $10.6491, or 14 percent, to $86.6491. Liberty Media shares fell $5.49, or almost 5 percent, to $105.56.

(Reporting By Ronald Grover; Editing by David Gregorio; Editing by Peter Lauria, Tim Dobbyn, David Gregorio and Jeremy Laurence)
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morriscroy · 12-04-2012, 09:49 PM

Would be interesting to see how this goes, assuming Netflix is still around in 2016.

Such as if there are new ongoing Star Wars tv shows in the next few years, which end up being exclusive on Netflix streaming.

**bruceames** · 12-04-2012, 10:04 PM

So Netflix is getting Disney but not until 2016? Man, that's light years away in this fast changing media distribution business. Like Morriscroy said, Netflix might not even be around in 2016.

morriscroy · 12-04-2012, 10:20 PM

Wonder why exactly this deal is starting in 2016.

One possible explanation I can think of offhand, would be if the present licensing arrangements (with other parties) don't expire until late-2015.

Dave J · 12-05-2012, 02:47 AM

Quote:

Originally Posted by morriscroy

Wonder why exactly this deal is starting in 2016.

One possible explanation I can think of offhand, would be if the present licensing arrangements (with other parties) don't expire until late-2015.

"Disney movies will be available for streaming on Netflix starting in 2016, after its current deal with Liberty Media's pay-TV channel Starz expires."

morriscroy · 12-05-2012, 07:36 AM

(More details).

It turns out the 2016 date is for streaming new movies a few months after they are in theaters. If this article is accurate, Netflix can start streaming Disney catalog stuff immediately, and direct-to-video releases starting next year.

http://www.mercurynews.com/business/...ts-blockbuster

Quote:

Starting in 2016, Netflix will have the right to stream Disney movies mere months after they are in theaters, a right that studios usually reserve for HBO and other subscription cable movie channels.

The deal marks one of the first times a major Hollywood studio has granted such distribution rights to a streaming video provider.

Quote:

Netflix will also get the right to stream some of Disney's older movies immediately and, beginning next year, will get the rights to stream its direct-to-video releases.

Wonder why exactly Disney decided to go with a streaming company for exclusive access of newer movies, and not something like cable. (ie. Besides money).

1stSilverado · 12-05-2012, 08:19 AM

Quick question...it says that Disney has ownership to Marvel, but I have watched and can still watch Iron Man 2, Captain America and Thor on Netflix. How is this possible?

morriscroy · 12-05-2012, 09:02 AM

Quote:

Originally Posted by 1stSilverado

Quick question...it says that Disney has ownership to Marvel, but I have watched and can still watch Iron Man 2, Captain America and Thor on Netflix. How is this possible?

Captain America (the 2011 film), Iron Man 2, and Thor are distributed by Paramount.

Such an arrangement is probably determined by how much control Disney/Marvel has over Paramount.

Malanthius · 12-05-2012, 10:54 AM

Quote:

Originally Posted by bruceames

So Netflix is getting Disney but not until 2016? Man, that's light years away in this fast changing media distribution business. Like Morriscroy said, Netflix might not even be around in 2016.

They might not be. But does this lock Disney in with Netflix? Or can say Amazon get this library as well? I can't remember is exclusivity was mentioned or not. I'll have to read the article again.

morriscroy · 12-05-2012, 10:15 PM

Quote:

Originally Posted by Malanthius

They might not be. But does this lock Disney in with Netflix? Or can say Amazon get this library as well? I can't remember is exclusivity was mentioned or not. I'll have to read the article again.

This will most likely be dependent on what is the exact agreement that was signed.

For example, if the exclusivity rights can be revoked and go back to Disney in a Netflix bankruptcy, then amazon, Starz, etc ... in principle can bid for it. If such a revocation clause doesn't exist, then whoever bids for it in a Netflix bankruptcy auction will get this exclusivity on the Disney library.

1stSilverado · 12-05-2012, 11:38 PM

Quote:

Originally Posted by morriscroy

Captain America (the 2011 film), Iron Man 2, and Thor are distributed by Paramount.

Such an arrangement is probably determined by how much control Disney/Marvel has over Paramount.

Fair enough, does Fox have any rights to star wars catalog? Could this mean that we might see "Star Wars holiday special" released finally.
For those of you that have no idea what the holiday special is, it was a magical Christmas special in 1978 that mesmerized an 8 year old (me), and made anticipation of a Christmas morning filled with Star Wars toys utterly fantastic.

Chris Gerhard · 12-06-2012, 03:16 AM

The Netflix Disney deal starts next year and should have an impact next year. I am not sure where the specualtion about Netflix bankruptcy is coming from but this is a huge deal and the competition was having a hard time keeping up before this deal.

I think Disney overpaid for Marvel and Lucas and will have to manage those properties properly or face grave consequences to its bottom line. I don't know if this is a smart move for Disney and Netflix or not but the negative impact for Amazon, Hulu Plus, and the upcoming Verizon/Redbox service might be really serious.

As far as new Star Wars films, sounds pretty risky to me. I have never seen the Star Wars Holiday Special but I do recall reading why we haven't seen it available for so long, it was considered too awful to see the light of day again by those that control it. I didn't read this Wikipedia article but I suspect it will explain the status. What rights Disney will have and whether or not Disney will do things differently isn't clear to me.

https://en.wikipedia.org/wiki/The_St...oliday_Special

elwaylite · 12-06-2012, 05:59 AM

Disney Inks Streaming Deal With Netflix

Glad you noticed I posted this in the "STREAMING" forum...

Can we get these combined?

morriscroy · 12-06-2012, 08:02 AM

Quote:

Originally Posted by Chris Gerhard

I am not sure where the specualtion about Netflix bankruptcy is coming from but this is a huge deal and the competition was having a hard time keeping up before this deal.

(Not bankruptcy per se, but off balance sheet risk).

http://www.forbes.com/sites/benzinga...comes-to-town/

Quote:

Richard Tullo, Director of Research at Albert Fried and Co., was unimpressed by the news. “In our view the NFLX deal with Disney takes the craft of PR to a high level as the company has a habit of issuing pressers and then lowering estimates over the last two years,” Tullo wrote in a note to investors. He added that his firm believes that shareholders are exposed to $500 million to $1 billion in “incremental off balance sheet risk.”

Quote:

This is all well and good, but it is too forward-looking to provide Netflix with any value today. A lot can happen in three years. Hulu or Amazon Prime could become the dominant player in streaming video, or Coinstar and Verizon might diminish Netflix’s growth. Comcast (NASDAQ: CMCSA), which offers a streaming video service for $5 per month, could prove to be powerful contender as well.

Disney may eventually become one of Netflix’s most valuable partners, but that deal is more than three years away from materializing. While Netflix appears to be stable with more than 30 million subscribers worldwide, the company is still vulnerable. Its future is anything but rock-solid. If Netflix crumbles before 2016, yesterday’s market move will have been for nothing.

morriscroy · 12-07-2012, 02:21 AM

(Tangential news).

Netflix's CEO Hastings is being investigated by the SEC, for possible violations of "regulation FD".

http://www.bloomberg.com/news/2012-1...book-post.html

Quote:

SEC staff alleges Netflix and its CEO violated rules governing selective disclosure, according to a company filing yesterday. The July 3 post by Hastings said Netflix viewing “exceeded 1 billion hours” of videos in June. The shares rose 6.2 percent that day.

12-04-2012, 09:31 PM	#1
Malanthius High Definition is the definition of life. Join Date: Nov 2011 Posts: 804	Netflix to get Disney films in TV distribution deal http://tv.yahoo.com/news/netflix-dis...--finance.html (Reuters) - Walt Disney gave a much needed boost to Netflix, becoming the first major Hollywood studio to use the video service to bypass premium channels like HBO that traditionally controlled the delivery of movies to TV subscribers. News of the deal, which enables Netflix to stream Disney's first-run movies to its subscribers, boosted Netflix shares by 14 percent. Liberty Media Corp, whose Starz group now distributes Disney movies on TV, fell almost 5 percent. Investors saw the Netflix-Disney deal as an important endorsement of the DVD rental and streaming service, which has been struggling with slowing subscriber growth and higher costs for content distribution. Disney movies will be available for streaming on Netflix starting in 2016, after its current deal with Liberty Media's pay-TV channel Starz expires. The deal is for both new Disney movies and library content such as "Dumbo" and "Alice in Wonderland." "An exclusive deal with Disney differentiates the Netflix content from Hulu Plus and Amazon Instant Video," said Anthony DiClemente, an analyst with Barclays Capital. But some analysts worried that Netflix paid too much to get Disney's movies. Tony Wible, an analyst with Janney Montgomery Scott, estimated in a report that Netflix paid more than $350 million a year for Disney's movies and said "we would not be surprised if (Netflix) would need to raise capital". By comparison, HBO agreed to pay an estimated $200 million annually in its so-called "output," or movie licensing deal, with 20th Century Fox earlier this year, according to the Los Angeles Times. The deal gives Netflix streaming rights to movies from Disney's live-action and animation studios, including those from Pixar, Marvel, and the recently acquired Lucasfilm. On October 30, Disney announced a $4 billion deal to purchase the famed studio founded by George Lucas, which will now make new episodes in the blockbuster "Star Wars" series. "This deal brings to our subscribers some of the highest quality, most imaginative family films being made today," Ted Sarandos, Netflix's chief content officer, said in a statement. "It's a leap forward for Internet television." DREAMWORKS EXCLUDED Movies from Steven Spielberg's DreamWorks Studios are not included in the deal, as that studio distributes its movies through CBS's Showtime on TV. Disney recently signed a deal to distribute DreamWorks' films theatrically after the studio's deal with Viacom's Paramount Pictures expired. The deal allows Netflix to stream Disney movies beginning seven to nine months after they appear in theaters, as Starz does now under Disney's prior agreement. The deal does not cover DVD rentals of Disney movies. Disney said in November that it would shut down its own video streaming service, Disney Movies Online, which had failed to catch on with users. A message on the 'Disney Movies Online' website said it would shut down on December 31. Netflix, which started its streaming business with mostly older films, has been moving to add more original programming and produces TV shows such as "Lilyhammer," which stars "Sopranos" actor Steven Van Zandt as an American gangster who starts a new life in Norway. The company also struck a high-profile deal with actor Kevin Spacey for "House of Cards." The Disney pact follows similar deals Netflix has inked for new films with smaller studios, including Relativity Media, The Weinstein company and DreamWorks Animation. The agreements have saddled Netflix with nearly $5 billion in contractual commitments over the next three years for deals its made for streaming content, the company said in a recent quarterly earnings report. Netflix's struggles over the last year, which have included missed subscriber guidance, an ill-fated attempt to split the DVD and streaming operations, and a swooning stock price, recently attracted the attention of billionaire activist investor Carl Icahn. Icahn disclosed in regulatory filings on October 31 that he had amassed a nearly 10 percent stake in the video company and suggested it should pursue a sale. Netflix responded by adopting a poison pill defense. Losing Disney's movies means Starz is left with only Sony Pictures for film content. The pay-TV channel cast the ending of its agreement with Disney as its decision, saying it preferred to use the money for original programming creation. Liberty Media's shares will "rebound," said Vijay Jayant, an analyst with International Strategy and Investment Group. "We believe it was Starz' decision to remain prudent and walk away from the bidding for Disney content," ISI said in a report, estimating that it might have cost Starz $400 million to keep the movies. Without that expense, Starz can step up its production of original series such as "Spartacus" and "Magic City," which ISI said have become more valuable to cable operators anyway. Netflix shares jumped $10.6491, or 14 percent, to $86.6491. Liberty Media shares fell $5.49, or almost 5 percent, to $105.56. (Reporting By Ronald Grover; Editing by David Gregorio; Editing by Peter Lauria, Tim Dobbyn, David Gregorio and Jeremy Laurence) @YahooTV on Twitter, become a fan on Facebook

12-04-2012, 10:04 PM	#3
bruceames Super Moderator Join Date: May 2006 Location: Novato, CA Posts: 15,355	So Netflix is getting Disney but not until 2016? Man, that's light years away in this fast changing media distribution business. Like Morriscroy said, Netflix might not even be around in 2016. __________________ RIP Kosty.

12-06-2012, 05:59 AM	#13
elwaylite You know who you are... Join Date: Aug 2006 Location: Lower Alabama Posts: 1,260	Disney Inks Streaming Deal With Netflix Glad you noticed I posted this in the "STREAMING" forum... Can we get these combined? __________________ Video: TC-P65GT30 / BDP-103 Audio: TX-NR809 / RF-82 II (2) / RC-62 II / VTF-15H HDTV: Dish / Hopper & Joey

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12-04-2012, 09:49 PM	#2
morriscroy High Definition is the definition of life. Join Date: Jun 2012 Posts: 965	Would be interesting to see how this goes, assuming Netflix is still around in 2016. Such as if there are new ongoing Star Wars tv shows in the next few years, which end up being exclusive on Netflix streaming.

12-04-2012, 10:20 PM	#4
morriscroy High Definition is the definition of life. Join Date: Jun 2012 Posts: 965	Wonder why exactly this deal is starting in 2016. One possible explanation I can think of offhand, would be if the present licensing arrangements (with other parties) don't expire until late-2015.

12-05-2012, 08:19 AM	#7
1stSilverado High Definition is the definition of life. Join Date: Oct 2011 Posts: 145	Quick question...it says that Disney has ownership to Marvel, but I have watched and can still watch Iron Man 2, Captain America and Thor on Netflix. How is this possible?

12-06-2012, 03:16 AM	#12
Chris Gerhard High Definition is the definition of life. Join Date: Nov 2005 Posts: 10,789	The Netflix Disney deal starts next year and should have an impact next year. I am not sure where the specualtion about Netflix bankruptcy is coming from but this is a huge deal and the competition was having a hard time keeping up before this deal. I think Disney overpaid for Marvel and Lucas and will have to manage those properties properly or face grave consequences to its bottom line. I don't know if this is a smart move for Disney and Netflix or not but the negative impact for Amazon, Hulu Plus, and the upcoming Verizon/Redbox service might be really serious. As far as new Star Wars films, sounds pretty risky to me. I have never seen the Star Wars Holiday Special but I do recall reading why we haven't seen it available for so long, it was considered too awful to see the light of day again by those that control it. I didn't read this Wikipedia article but I suspect it will explain the status. What rights Disney will have and whether or not Disney will do things differently isn't clear to me. https://en.wikipedia.org/wiki/The_St...oliday_Special