Netflix, DreamWorks Animation Partner for Slate of Original Programming17 Jun, 2013 By: Erik Gruenwedel, Chris Tribbey
The TV shows follow up on a 2011 movie streaming deal between the two companies and will be based, in part, on animation hits 'Shrek,' 'Madagascar,' 'Kung Fu Panda' and 'How to Train Your Dragon'
Netflix and DreamWorks Animation June 17 said they have signed a multi-year deal to create more than 300 hours of original series based on the studio’s franchise hits Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon, among others.
The license agreement, which is the largest deal for original content in Netflix history, is also the first time DreamWorks Animation's characters will be introduced into the television market as a branded collection of shows.
It also signals another major embrace of the subscription video-on-demand market by a Hollywood studio, underscoring over-the-top platforms’ rising profile in original (notably children’s) content distribution into the home and on connected devices.
The deal represents a cornerstone of a new initiative by DreamWorks Animation to expand its television production and distribution worldwide. The new shows will also be based on the Classic Media library ("Casper, the Friendly Ghost," "Mr. Magoo" and "Rocky & Bullwinkle," among others), which DreamWorks acquired in 2012.
The first series are expected to begin streaming in 2014 across all Netflix territories.
“This 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,” Netflix chief content officer Ted Sarandos said in a statement.
Indeed, DWA and Netflix in September 2011 inked a streaming deal for the animation studio’s movies and catalog titles released in the pay-TV window beginning this year.
In February, Netflix and DreamWorks announced their first-ever Netflix Original Series for kids based on the highly anticipated film Turbo, which bows July 17. "Turbo F.A.S.T." picks up with the speedy snail where the feature film left off and will begin streaming in December.
Also coming to Netflix in the United States and Latin America next year will be new DreamWorks Animation feature films, beginning with The Croods, which grossed more than $575 million at the worldwide box office, followed by Turbo and the big-screen adaption of Mr. Peabody and Sherman, which opens in theaters in March 2014.
"Netflix is a visionary company that continues to redefine the way audiences watch television and it is a thrill to add to their growing momentum,” DreamWorks Animation CEO Jeffrey Katzenberg said in a statement.
While the deal represents Netflix's largest original content agreement, notably missing is the price tag the SVOD pioneer has to absorb.
"We're seeing a real arms race among content distributors for these types of programs ... but at a certain point in time investors will want to know what they're paying for this opportunity," Dennis Berman, Wall Street Journal Marketplace editor, told CNBC.
Michael Pachter, analyst with Wedbush Securities in Los Angeles, said the bulk of the 300 hours is going to be catalog programming, as DreamWorks Animation has yet to produce any original TV programming except for "The Penguins of Madagascar," which is produced by Nickelodeon for Nick Jr.
Pachter said Netflix is trying to replace the immensely popular "SpongeBob Square Pants," which disappeared when Viacom inked a SVOD deal with Amazon Prime Instant Video.
"I think what Netflix is doing is absolutely correct," Pachter told CNBC. "They're trying to replace high-quality content with similarly high-quality content. [But] I think they're falling short on this one. I'm not quite sure they're getting the same kind of quality [as with Viacom]. And I'm not sure it appeals to kids."