Recent times have been tough for once-unstoppable giant Netflix. The end of a deal with Starz that afforded them streaming rights to a bevy of films ended, leaving customers complaining about the dwindling selection of the Watch Instantly feature. A separation of the streaming service and the DVD by mail service created a huge price hike that saw customers canceling their accounts in record numbers. A creation of a new company called Quikster lead to the entire Internet pointing and laughing. It’s like those guys can’t catch a break! You know what they say though, “it’s always darkest before the dawn.” I’m not sure exactly what that means, but I think it’s fancy-speak for “just chill.”
Netflix may not be doomed after all. As a matter of fact, the New York Times has recently broke the news that the company has just struck a new, very important deal with DreamWorks that will give them exclusive rights to a whole host of their films. That potentially means access to kids’ stuff like Antz, Shrek, and Kung Fu Panda, dramas like Almost Famous, A Beautiful Mind, and American Beauty, and comedies like Road Trip and Old School. This is quite a coup for a company that people have spent the last week predicting the death of.
Normally exclusive rights to studio collections like this go to HBO, who has a whole warehouse of money to throw at studios, Scrooge McDuck style. Striking this new deal with Netflix over HBO has a couple of advantages for DreamWorks, like they can still sell digital copies of their movies under the Netflix deal, but still, Netflix must have ponied up quite a bit of cash to make this happen. Analysts estimate that it’s probably around $30 million a picture. Normally HBO is the king of the mountain when it comes to bidding wars, so this shows how much weight Netflix still has to throw around.
What does this mean for HBO? Not much. At this point they’re maintaining their subscriber base mostly through the creation of original programming. HBO is practically a movie studio unto itself. Netflix, comparatively, has only just dipped its toe into the content generation waters by funding a remake of House of Cards, which they will distribute exclusively. As long as HBO keeps creating great series and mini-series they are going to be fine. Netflix, on the other hand, is still wholly dependent on streaming deals with studios to maintain relevance. After losing all of their Sony titles in the dissolution of the Starz deal, this infusion of new DreamWorks titles can’t be seen as anything other than good.
I’ll let Ted Sarandos, Netflix’s chief content officer, have the last word, “This is one of the few family entertainment brands that matter. It’s also a signal to people that we are in no way moving away from movies. Our programming is just reflecting more and more what people want.”