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Netflix Signs Deal with DreamWorks Animation

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Well, this came at the right time: after a bruising week of missteps that made Netflix look surprisingly vulnerable, the streaming movie service has completed an historic deal with DreamWorks Animation that will supply it with premium films and TV specials. 

DreamWorks has chosen to sign with Netflix, rather than re-upping with HBO, making it the first major movie studio to opt for a streaming service rather than pay TV. The New York Times, which appears to have broken the story, says that analysts estimate the deal is worth $30 million. The details of the agreement are still unknown, including the number of years it covers and the number of movies and TV specials Netflix will get. Subscribers will begin seeing DreamWorks Animation content in 2013.

The decision supports the idea that, in the near future, viewers won't distinguish pay TV from streamed content as long as it's easily available on their home televisions. "We are really starting to see a long-term road map of where the industry is headed," the Times quoted Jeffrey Katzenberg, CEO of DreamWorks Animation, as saying.

The announcement is sure to be a much-needed boost for Netflix. Earlier this year, it failed to renegotiate a deal with pay channel Starz, which currently supplies the company with Disney and Sony content. Just this past week, Netflix made an unwanted change to users' film queues and then split the DVD-by-mail service from the rest of the company. This last move angered subscribers, who preferred the convenience of getting DVDs and streamed movies from the same service. The Times estimates that Netflix lost half its value in the previous two months.

If Netflix is able to deliver premium movies while avoiding any more missteps, consumers will likely forgive it. Netflix looked down the past week, but this DreamWorks deal shows that it's far from out.

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