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Netflix Inks ‘FilmDistrict’ Streaming Deal

1 Dec, 2010 By: Erik Gruenwedel

Netflix Inc. Dec. 1 said it signed a streaming agreement with FilmDistrict for the independent producer’s first-run theatrical releases.

Under terms of the multiyear deal, Netflix beginning in 2011 will have access to a variety of crime and sci-fi movies during the pay-TV window several months following the packaged media window. FilmDistrict releases from four to eight theatrical movies a year.

Initial films covered under the deal include Drive, director Nicolas Winding Refn's adaptation of the James Sallis' crime tale starring Oscar-nominated duo Ryan Gosling and Carey Mulligan, and the sci-fi action adventure film Lockout, starring Guy Pearce and Maggie Grace, produced and co-written by Luc Besson, and co-directed by James Mather and Stephen St. Leger.

Ted Sarandos, chief content officer with Netflix, said the Los Gatos, Calif.-based online disc rental pioneer has a long history with the founders of FilmDistrict.

“I have long admired [Oscar-winning producer] Graham King's amazing production success with movies like The Departed and Blood Diamond, which are among the most watched and highly rated movies of all time by Netflix members,” Sarandos said.

The deal is noteworthy in that Netflix has said the majority of its streamed content on a monthly basis is TV programming, and not feature-length films. Indeed, aforementioned The Departed and Blood Diamond rate high with Netflix subscribers on disc, not streaming. 

In the past six months, Netflix has inked streaming deals with pay-TV channel Epix, NBC Universal and Nu Image/Millennium Group. Analyst Eric Wold with Merriman Curhan Ford in New York believes Netflix will continue to flex its cash flow to upgrade streaming content.

"Following the price increases announced two weeks ago ... our expectation [is] that existing subscribers will mostly choose to pay the higher prices," Wold wrote in a note.

The analyst says that as Netflix's subscriber base grows (19.6 million by the end of the year), reaching parity with the top cable operators, content owners will direct content its way.

"We do believe ... content owners will increasingly view Netflix as a stronger distribution and monetization outlet," Wold wrote. He is projecting 27 million subs by the end of 2011 and 34.4 million in 2012.

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