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Netflix, MGM Ink Exclusive Streaming Deal in the U.K., Ireland

8 Nov, 2011 By: Erik Gruenwedel

Deal includes next year's 'Hobbit' movies and ups the ante in burgeoning subscription VOD land rush in Western Europe between Netflix and Amazon-owned LoveFilm

Netflix and Metro-Goldwyn Mayer Studios have signed a multiyear agreement that will allow Netflix subscribers in the United Kingdom and Ireland in early 2012 to stream exclusive first-run theatrical movies from the vaunted film studio.

Los Gatos, Calif.-based Netflix last month said it would bow streaming service in the United Kingdom and Ireland early in 2012 — the service’s first foray into Europe following foreign expansion into Canada, Latin America, the Caribbean and Mexico.

Financial terms of the deal were not disclosed. The deal ups the ante in a burgeoning subscription-VOD land rush in Western Europe between Netflix and Amazon-owned LoveFilm. Indeed, it’s noteworthy that the agreement departs from Netflix’s preferred (and less-expensive acquisition) strategy to license content non-exclusively.

Appearing exclusively on Netflix within one year of their theatrical release will be upcoming feature films The Hobbit: An Unexpected Journey and The Hobbit: There and Back Again — the highly anticipated prequels to the Academy Award-winning "Lord of the Rings" trilogy, directed by Peter Jackson. Other titles in the deal include Zookeeper, starring Kevin James, and the upcoming films Hansel & Gretel: Witch Hunters, with Jeremy Renner and Gemma Arterton, and 21 Jump Street, featuring Channing Tatum, Jonah Hill and Ice Cube.

With the "Hobbit" films co-produced by MGM and New Line — the latter owned by Warner Bros. and projected to be a much-needed franchise replacement for "Harry Potter" — the reality is that Netflix will have exclusive rights to a Warner franchise it would never get in the United States. Instead, the films' domestic rights would likely fall to Warner Home Video and Time Warner-owned HBO, among other non SVOD channels. The Hobbit: An Unexpected Journey launches theatrically Dec. 14, 2012.

In addition, MGM catalog titles will also be available, including Capote, Fargo, The Usual Suspects, West Side Story and The Amityville Horror, among others.

“We are excited to be extending our relationship with MGM from the U.S. to these important markets and proud to be the exclusive home for their films in the traditional Pay TV window,” said Netflix CCO Ted Sarandos in a statement.

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