I missed this one on the first go-around but Netflix [NFLX] surged almost 7% on news of a new deal, effective September 1, that will bring Lions Gate, Paramount, and MGM films to it’s internet streaming service. If you’re a Netflix subscriber, you know how annoying it is to browse the library thinking, “This really seems like the future of movies at home, but there’s just NOTHING GOOD.” Thankfully, another step toward disclessness is just around the corner.
Ted Sarandos, the chief content officer for Netflix, said he is essentially taking the “huge pile of money” that Netflix pays in postage for DVDs by mail — about $600 million this year — “and starting to pay it to the studios and networks.”
Netflix’s open checkbook demonstrates that Internet streaming is clearly coming to the forefront in Hollywood, but in a carefully controlled manner. Mr. Sarandos said in an interview Tuesday that the content deals were part of “our continued commitment to making streaming a better and better proposition for our subscribers.”
So they continue to lead the push for television and cinema-warez to go streaming-on-demand, alongside Hulu’s announcement that it will offer a complete and archived premium option in subscription-based Hulu Plus. As this trend continues for media and software/web-based services (and everybody hard at work on cloud computing), I expect to see the subscription model conquer more fields, as long as the businesses employing them can stay afloat long enough for their service to stick.
The most important thing about the deal, though? After 10 years of operation, we finally know why it’s not called “DVDs by Mail-O-Vision.”