Netflix strikes movie deal with Weinstein Co.
Associated Press | 8/22/2013, noon
BEVERLY HILLS, California (AP) _ In a drive to add subscribers, Netflix has expanded on a movie licensing deal with The Weinstein Co. that will add more films to its Internet video service beginning in 2016.
The multi-year agreement announced Tuesday builds upon a partnership that Netflix Inc. forged with Weinstein Co. last year. That deal gave it the streaming rights to the Oscar-winning film, "The Artist,'' as well other foreign films and documentaries from the 8-year-old studio.
The new deal gives Netflix the rights to show all movies released by Weinstein Co. and its subsidiary, Dimension Films, before they appear on pay-TV channels. That makes it more competitive with channels like HBO and Showtime that have traditionally been the first place to see films after their theatrical runs.
Investors applauded Netflix's latest coup as the company's stock surged to a new two-year high of $272.47 before retreating slightly. The shares were up $12.48, or nearly 5 percent, to $272.26 in Tuesday's afternoon trading.
Netflix's exclusive arrangement with Weinstein Co. begins with films released in theaters during 2016. That's around the same time Netflix will begin showing films for the first time outside a movie theater from The Walt Disney Co., part of an agreement announced last year.
Financial terms of the latest Weinstein deal weren't disclosed.
Netflix has been spending heavily to gain exclusive content licensing rights and finance its own original programming. CEO Reed Hastings wants to attract 60 million to 90 million U.S. subscribers to the company's $8-per-month service. Netflix ended June with nearly 30 million subscribers in the U.S. and 7.75 million international customers scattered through 39 other countries.
The company, which is based in Los Gatos, California, is spending about $2 billion annually to stock its Internet video library as it vies for viewers against premium cable channels such as Time Warner Inc.'s HBO and other online services, including rapidly expanding offering from Amazon.com Inc.
Weinstein Co. was launched in 2005 by Bob and Harvey Weinstein, the brothers who founded Miramax Films in 1979. Since then, Weinstein Co. has released two films that have won an Academy Award for Best Picture, "The Artist'' and "The King's Speech."
"We look forward to reinventing the pay TV window with the Weinsteins," said Ted Sarandos, Netflix's chief content officer.