Netflix’s stock jumped 14% after it announced a new deal with Disney.
Starting in 2016, Netflix will be streaming Disney movies in the “pay TV window.” That is industry-speak for the time after a movie is available for rent or sale. Typically, this is when HBO gets movies.
For a long time, movie companies had been stopping Netflix from getting movies so quickly. The idea is to create tiers of pricing. So, pay $15 to see the movie in the theatre. Then pay $5 to rent it months later. Then months after that, if you’re paying a subscription fee to HBO, you get to see it for “free.”
Additionally, Netflix is going to get access to Disney’s library of films. Netflix is already doing big business serving up movies and shows for kids. It will build on this strength with animated Disney films like Dumbo and Alice In Wonderland.
For some context on why this is big news, screenwriter Arash Amel tweeted, “The Disney Netflix deal is a huge moment in history of movie windows in the US. A long time coming, but end of an era for pay-TV monopoly.”
This deal puts Netflix on more even footing with HBO, Showtime, and others.
Here is the full release:
Netflix Inc. and The Walt Disney Company today announced a new multi-year licensing agreement that will make Netflix the exclusive U.S. subscription television service for first-run live-action and animated feature films from The Walt Disney Studios.
Beginning with its 2016 theatrically released feature films, new Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature titles will be made available for Netflix members to watch instantly in the pay TV window on multiple platforms, including television, tablets, computers and mobile phones. Also included in the agreement are high-profile Disney direct-to-video new releases, which will be made available on Netflix starting in 2013.
Separately, Disney and Netflix have reached agreement on a multi-year catalogue deal that today brings to U.S. Netflix members such beloved Disney movies such as “Dumbo,” “Pocahontas” and “Alice in Wonderland.”
“Disney and Netflix have shared a long and mutually beneficial relationship and this deal will bring to our subscribers, in the first pay TV window, some of the highest-quality, most imaginative family films being made today,” said Ted Sarandos, Chief Content Officer at Netflix. “It’s a bold leap forward for Internet television and we are incredibly pleased and proud this iconic family brand is teaming with Netflix to make it happen.”
“With this cutting-edge agreement, we are thrilled to take our highly valued relationship with Netflix to the next level by adding Disney’s premier films to their programming line-up,” said Janice Marinelli, President, Disney-ABC Domestic Television. “Netflix continues to meet the demands of its subscribers in today’s rapidly evolving digital landscape, and we are delighted that they will have much earlier access to our top-quality and entertaining slate,” she continued.
Financial terms of the agreement were not disclosed.