Saturday, October 31, 2020

NETFLIX IN $300-MILLION DEAL WITH DISNEY

December 5, 2012 by · Leave a Comment 

Back in June of last year, Netflix chief Reed Hastings said that he would be willing to pay Liberty Media’s Starz as much as $200 million to renew its deal with the movie channel, which gave Netflix exclusive rights to screen Disney and Sony movies in the “pay TV window” — around eight months after their theatrical release. Starz apparently wasn’t interested. Then, in September, Netflix lost its exclusive deal with Epix for Paramount, Lionsgate, and MGM movies. In effect, it became principally an outlet for TV reruns, particularly serialized shows that viewers wanted to watch in marathon sittings. Now, Netflix has made an end run around Starz, making a deal for a reported $300 million that, beginning in 2016, will bring it not only Disney and Pixar films, but also those from Disney-owner Marvel and Lucasfilm. Disney also agreed to give Netflix nonexclusive streaming rights to many of its classic titles beginning at once. Netflix stock, which has ridden a rollercoaster over the past two years, jumped 14 percent on the news to $85.65. But some analysts remained skeptical, questioning where the money is going to come from to pay for Netflix’s expensive content deals. (In an interview with Bloomberg News on Monday Ted Sarandos, chief content officer for Netflix, said that his company also hopes to land a similar deal with Sony.) Michael Pachter of Wedbush Securities told the Associated Press, “These costs are going to sink Netflix.” At the very least, he commented, they will keep Netflix profitless for the next several years. In a note to clients, he wrote, “Despite recent commentary from Carl Icahn, we see few potential strategic acquirers of Netflix, and think the stock is overvalued.” Meanwhile, Verizon chief Lowell McAdam said on Tuesday that, contrary to rumors, Redbox Instant will not be launching this month. The streaming service, which is expected to challenge Netflix’s dominance, will not kick off until sometime next year, McAdam said at an investor conference in New York.