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Netflix inks movie and online movies deal with Relativity Media

LOS ANGELES - U.S. DVD rental service Netflix Inc said it has signed a deal with media company Relativity Media LLC to stream major theatrical movies to Netflix customers before they are shown on premium pay-television channels.

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The deal marks a continued shift in the distribution of major motion pictures in the United States, Netflix said in a statement on Tuesday. Under the deal, popular contemporary movies previously shown exclusively on premium channels such as HBO, Showtime and Starz will now become available to be streamed from Netflix months after their release on DVD. The first movies to be distributed will be "The Fighter" and "Skyline."

It will be the first time studio quality theatrical feature films will be streamed via subscription by Netflix instead of being broadcast by the traditional pay channels and it opens up a new revenue stream for such movies, the company said. Relativity Media has financed, co-financed or produced more than 200 features, generating more than $13 billion in worldwide box office revenue. "Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release," Ted Sarandos, chief content officer for Netflix said.

Netflix is adding to the group of movies that its subscribers can watch online or over Internet-connected devices at the same time as they would have appeared on premium pay TV channels such as HBO or Showtime. The deal announced Tuesday with film financier Relativity Media adds to a batch of newer movies from Disney and Sony that can be watched online through Netflix' 2-year-old deal with Starz Entertainment on a service called Starz Play. With new movies from Relativity available early next year, about one-fifth of the rental movie chain's 100,000 movie and TV show titles can now be streamed online. The company is gradually transforming itself from a mail-order DVD service to one that makes available content online over game consoles, Blu-ray players, mobile devices and TVs.

Source Info: Yahoo News 1 and 2