DreamWorks Animation is behind the entertaining and successful movies like Madagascar, Shrek and How to Train Your Dragon. The company told the world that they had completed a deal that will flow its films and television specials through Netflix.
The Netflix deal is estimated to be worth $30 million per picture to DreamWorks over a unclear amount of years. The deal could very well be the first time a big Hollywood distributor has chosen Web streaming over pay television, according to the New York Times.
Timing is everything in Hollywood as far as business is concerned. The fact that DreamWorks contract comes as Netflix is trying to navigate through a storm of challenges is not uncoincidental. Competition is getting fierce with Apple, Vudu (Wal-Mart) and Amazon. Now, Blockbuster announced its plan to do both stream and DVD-by-mail service.
Netflix knows access to movies and TV shows is what matters most in video streaming and in Hollywood. To get off the ground, Netflix made some awesome deals with studios. Now, the company is bargaining a little bit tougher. The result will be lost deals with Walt Disney Studios and Sony Pictures Entertainment because of failed renegotiation with the premium cable channel Starz.
Other troubles brew at Netflix. They lost one million customers when they raised their prices for its combination Internet streaming and DVD service, and then divided the video stream service and DVD rental into two companies. It didn’t make customers very happy. It created a lot of confusions, too.
Now, Netflix is continuing on with its venture by streaming DreamWorks films starting in 2013. Netflix is harnessing the consumer shift to streaming content on computers, tablets and Internet-connected televisions while making deals with smaller suppliers as well. I am sure Netflix has other deals up their sleeves.