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Netflix Inks Disney/ABC Streaming Deal

8 Dec, 2010 By: Erik Gruenwedel

Netflix Inc. Dec. 8 said it signed a new license deal with Disney-ABC Television Group that will give it streaming access to programming 15 days after initial broadcast.

Under terms of the deal, Netflix will have access to prior season episodes of current ABC series “Grey's Anatomy,” “Desperate Housewives” and, for the first time, “Brothers & Sisters.” In addition, every episode of “Lost” and “Ugly Betty” will be available, as will for the first time all seasons of “Scrubs” and “Reaper.”

Also new to Netflix is programming from the Disney Channel and ABC Family. Series include “Phineas and Ferb” and “Good Luck Charlie,” and expanded offerings of “The Suite Life on Deck” and “Wizards of Waverly Place;” as well as library offerings from “Hannah Montana” and “The Suite Life of Zack & Cody.”

ABC Family content includes series “Greek,” “Make It or Break It,” “The Secret Life of the American Teenager” and “Melissa & Joey.”

Disney Channel and ABC Family movies such as High School Musical, High School Musical 2, Camp Rock and Beauty & the Briefcase, as well as new releases Avalon High, Camp Rock 2: The Final Jam and Revenge of the Bridesmaids, also will be available.

“TV content streamed from Netflix has proven to be immensely popular with our members,” said Ted Sarandos, Netflix’s chief content officer.

Indeed, TV programming represents the majority of content that at least 50% of Netflix’s 17 million subscribers stream for up to 15 minutes a month.

“Opening up ABC Family for the first time [is an] important step in creating a wide and diverse selection of content Netflix members of all ages can watch,” Sarandos said.

Eric Wold, analyst with Merriman Curhan Ford in New York, said Netflix’s expanded deal with Disney/ABC and expected pricey renewal with Starz Entertainment denote a priority toward streamed content.

“We have been expecting Netflix to increase its spending on content as consumers shift away from disc usage (saving postage/shipping costs) and even more so with the recent price increases (which we estimate could add an incremental $200 million in operating profit from the current subscriber base alone),” Wold wrote in a note. “While we believe some of the incremental price increase benefit will flow to earnings, we expect Netflix to put the majority of it to work through incremental content.”

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