Late last night news broke that Netflix beat out HBO to sign a deal to stream DreamWorks movies.
Great news for battered Netflix, right? Hardly. If anything, it just highlights the challenges facing Netflix in the present and the future.
First off, the Netflix deal with DreamWorks doesn’t start until 2013. For customers complaining about Netflix’s crappy streaming selections, this deal does nothing for next year.
Second, while Netflix may have beaten HBO for the DreamWorks movies, it’s paying a pretty steep price at an estimated $30 million per movie. HBO was estimated to be only paying $20 million per DreamWorks movie.
Netflix’s stock is in free-fall. We doubt an expensive deal that won’t kick in for a year will do much to change that.
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