Monday, September 26, 2011, 9:36 AM ET|Posted by Will RichmondDreamWorks Animation's new output deal with Netflix gives the beleaguered streaming-only provider a much-needed lift, but unfortunately not until DreamWorks' 2013 movies are released. Under the deal, Netflix may pay up to $30 million per movie, an increase from the $20 million that HBO is believed to have been paying DreamWorks. The press release also notes that some of DreamWorks' catalog movies such as "Kung Fu Panda," "Madagascar 2," "Chicken Run" and "Antz" will also be included over time. The DreamWorks deal comes on the heels of last week's news that Netflix licensed library programs from Discovery Communications.
The deals are important for at least two reasons: they bring marquee movies and well-known (if niche) TV programs to Netflix's streaming service and they show that despite the company's recent stumbles and swirling uncertainty, established media companies still have confidence in Netflix.
One thing that's for sure is that the streaming library needs all the help it can get. I got another first-hand reminder of this last Friday night when my wife and I sat down to watch something on Netflix streaming and saw how thin the selection is (in fact as I started scrolling through, my wife, who spends more time with Netflix than me, warned me she's looked repeatedly and that I wouldn't find anything great. We ended up settling on "Heartburn" a mediocre 25-year old Meryl Streep-Jack Nicholson movie).
Satisfying streaming subscribers that they'll find something they're excited about watching whenever they sit down with the service is Netflix's most pressing issue. The DreamWorks deal helps, but not for a while.