Rumor: Netflix to grab exclusive DreamWorks contract away from HBO

An agreement between Netflix and the family-friendly film studio DreamWorks Animation SKG that’s been behind numerous hit animated features including the recent “Kung Fu Panda 2” could end with the streaming video giant nabbing exclusive rights to the company’s impressive roster of content from previous holder, HBO.

Rumor: Netflix to grab exclusive DreamWorks contract away from HBO

On Sunday Bloomberg news cited an anonymous source who said the deal is still being negotiated, and despite the possibility of an official confirmation in the coming days may not take effect for a couple years.

“What Netflix is trying to do is lock up as much content as it can,” said Barton Crockett, Senior Analyst with Lazard Capital Markets, in a video interview with the publication. Crockett pointed to Netflix’s “challenges with content” (in March it lost some rights to certain Showtime and Starz shows) and increased competition from companies like Amazon, which began an online video streaming service this year for Amazon Prime subscribers, as likely motivators for the upcoming deal.

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A second inside source informed The Hollywood Reporter that HBO, which currently holds the rights to DreamWorks Animation movies, would agree to end its contract prematurely citing the rise of other opportunities within the animated movie field – specifically, a new deal with Summit Entertainment. The movie news site speculated that such a deal wouldn’t just benefit Netflix, as the animation house’s stock has foundered this year. Such a move could provide a well-needed bump, it reasoned.

DreamWorks Animation’s films have typically proven both critically and commercially successful. The studio has already confirmed a handful of upcoming titles over the next few years, including “Madagascar 3,” “Mr. Peabody & Sherman,” and the Shrek spin-off “Puss in Boots” slated for this fall.

Netflix remains eager to expand its business even as criticism of recent business practices reaches a boiling point. The company announced a price hike two weeks ago that angered many long-time subscribers, and changes made to the website in June elicited complaints. CEO Reed Hastings’ next target is rumored to be Europe, which could see a Netflix option in 2012.

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