MUMBAI: Online movie subscription service Netflix and Relativity Media have announced a long term agreement. Under this pact, major theatrically released films owned by Relativity Media will be licensed directly and exclusively to Netflix for streaming to its subscribers during the pay-TV window.
Traditionally, these films have flowed through Relativity‘s studio releasing partners to output deals with premium TV channels.
The deal marks a continued shift in the distribution of major motion pictures in the US. Under the agreement, an increasing amount of popular contemporary movies previously encumbered by pay TV agreements with premium channels such as HBO, Showtime and Starz will become available to be streamed from Netflix months – and not years – after their release on DVD. It will be the first time that studio quality theatrical feature films will be streamed via subscription by Netflix instead of being broadcast by the traditional pay providers, and it opens up a new revenue stream for such movies.
Among the first wave of films covered under the Netflix-Relativity deal are The Fighter starring Christian Bale, Mark Wahlberg and Amy Adams and distributed by Paramount Pictures, and Skyline, co-directed by the Brothers Strause and released by Rogue Pictures and Universal Studios. Both films are scheduled for theatrical release later this year and will be available at Netflix in early 2011. Also on tap for Netflix are Rogue Pictures‘ Nicolas Cage action/thriller Season of the Witch and Movie 43, written and directed by Peter Farley. Both are set to hit theatres this year as well.
Relativity has financed, co-financed or produced more than 200 features, generating more than $13 billion in worldwide box office revenue. 50 Relativity films have become Top 10 box office releases during the past two years. Current Relativity theatrical releases include Robin Hood, Get Him to the Greek and Grown Ups. Relativity produces and/or finances between 20 and 30 pictures a year, and it has more than 10 single picture movies – films it is financing and producing fully – that are scheduled to be released over the next 12 months.
Broadening the range and appeal of content available for Netflix members to watch instantly is among the company‘s top priorities, and the agreement with Relativity is a meaningful step in building the company‘s streaming offer.
Netflix chief content officer Ted Sarandos says, "Our continued goal is to expand the breadth and timeliness of films and TV shows available to stream on Netflix. Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release. Through our partnership with Relativity, these films will start to become available to our members just months after their DVD release."
Relativity CEO Ryan Kavanaugh says, "We have always been about finding new ways to grow and monetize our business. This clearly is a natural step in the evolution of the movie business and opens up a whole new world of revenue and marketing opportunities. Netflix has certainly made its mark, with a service that reaches over 13 million people and allows consumers to have what they want, when they want it. We have a shared vision, and this deal marks a significant change in our industry."
