Earlier today, DreamWorks Animation announced it has committed to providing Netflix with 300 hours of original programming of episodic TV. This is type of deal is relatively unprecedented in the entertainment business.
Though the spokesperson was ambiguous about the exact content of their new joint venture, the upcoming programs will feature characters inspired by many of DreamWork’s most beloved animations. Original series will not begin streaming on Netflix until 2014. Subscribers in the United States and Latin America will be able to watch familiar titles such as The Croods and Mr. Magoo.
DreamWorks, in seeking to expand into television, avoids the volatility of the movie market but runs into virgin territory with distribution. DreamWorks could have started a cable channel of its own but instead chose to sidestep cable completely by streaming directly. Online content streaming is a burgeoning but competitive market with content distributors like Hulu, Amazon, and Netflix vying for supremacy.
Netflix has pulled ahead of it competitors by spearheading original content like Arrested Development and House of Cards. Expectations have been running high in the run up to Netflix’s much anticipated release of Arrested Development. With stocks soaring, the company is under a lot of pressure to prove to its investors that they have the content to increase their subscriber base.
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In response to the recent news, the market has been buzzing over Netflix shares, driving the price up by more than seven percent and those of DreamWorks by about four percent.
According to Ted Sarandos, Netflix's chief content officer, the deal, “represents a major expansion of what's already a phenomenal relationship, allowing us to bring beloved DreamWorks characters to the 40 countries where Netflix operates and setting the stage for us to innovate together as we expand into new markets."