It's a good move, but Netflix needs more of those to bolster its catalog
Netflix is navigating some troubled waters, with the decision to split its DVD rental business from the streaming business and the previous price hike that came from creating two separate companies.With stock prices tanking and subscribers angry, Netflix was in need for some good news and it got it.
The company has signed a deal with DreamWorks Animation, the animation studio behind blockbuster hits such as Madagascar, Kung Fu Panda and Shrek.
What's more, DreamWorks passed on a similar deal with premium cable network HBO and went with Netflix instead.
On the face of it, this seems like the kind of thing that Netflix needs to be announcing, especially after losing movies from both Walt Disney Studios and Sony Pictures Entertainment.
But the deal is not really as great as it seems at first glance. For one, the deal is with DreamWorks Animation alone and not with DreamWorks Studios, meaning access to only a handful of movies.
What's more, the first movies part of the deal will show up on Netflix sometime in 2013 so this will have no impact on what subscribers get to watch for more than a year.
Even then, it's unclear what movies Netflix will get to stream as older titles will become available in time. Still, the studio will have three movies coming out that year, all new franchises, which will presumably be made available to Netflix soon after they are released.
Netflix is said to be paying some $30 million per title for the rights to stream DreamWorks Animations movies.
But Netflix will have to make a lot more of this types of deals to have a chance of surviving in the much tougher environment it's facing today, as opposed to only a few years ago when the streaming option started picking up.