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Netflix outbid HBO for a DreamWorks streaming deal

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After the deciding to split the company in two, Netflix is struggling for some good news. News of it’s new deal with DreamWorks can help, though it won’t come into effect for a while.

Netflix has struck a deal with DreamWorks to bring the studio’s movies and TV specials within the TV On Demand window. That way Netflix will get DreamWorks movies like Shrek and Madagascar right when they’re available in other places. To get the deal Netflix had to outbid HBO, which hasn’t been done before. The estimates put Netflix’s deal at $30 million, while HBO’s bid was $20 million for the content. Unfortunately, however, the deal won’t come into effect into 2013.

With Netflix losing a lot of content with the end of the Starz deal looming in the distance, this is pretty important. It will come a bit late, but at least there’s some promise there. Netflix needs to make more deals like this that will come into effect sooner. Getting streaming movies during the pay-TV period is great, but customers will want more movies in that period. DreamWorks is a nice start, but Netflix really needs a big studio to make this work. Hopefully that can happen, I remain cautiously optimistic about Netflix’s future, but I also fear that could be a bit too optimistic.

Read [New York Times]

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