Netflix Gains Disney Streaming Rights in End Run on Cable TV

First Time a Major Studio Hands Recent Releases to Digital Distributor

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Netflix has signed a multiyear accord to carry Walt Disney Co. animated and live-action films, marking the first time a major studio has bypassed traditional cable-TV outlets for newer releases that have traditionally appeared on premium channels such as HBO.

The agreement starts with movies released in 2016, the companies said today in a statement. Financial terms weren't disclosed. The accord replaces one with Liberty Media Corp.'s Starz Entertainment that expires in 2015.

The deal is a coup for Netflix CEO Reed Hastings, providing U.S. subscribers exclusive access to movies from Pixar, Marvel and Disney.

"It was a long slog, but ultimately we displayed enough sustainability that Netflix became a real and viable option for the pay-TV window," Ted Sarandos, the video service's chief content officer, said in an interview.

Netflix beat out several bidders, Mr. Sarandos said, without identifying them.

The company, with 30 million users worldwide, will bid aggressively for exclusive rights to Sony Corp. films when that studio's contract with Starz ends around 2016, Mr. Sarandos added. DreamWorks Animation SKG, which puts out two to three films a year, already has an agreement with the $7.99-a-month video service.

The Disney accord includes immediate access to older classics such as "Dumbo" and new direct-to-video releases in 2013. Netflix doesn't gain films from "Star Wars" creator Lucasfilm, which Disney is buying for $4.05 billion and doesn't yet own, according to Jonathan Friedland, a Netflix spokesman. He declined to say whether they would be included later.

~Bloomberg News~

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