Netflix is hoping customers still want it.
The company is announcing a video-on-demand rights deal that will bring its customers Dreamworks Animation’s library of movies like “Puss in Boots” and “Kung Fu Panda 2,” as well as upcoming films.
The cost: $30 million per new film, according to The New York Times.
It’s the first time a major Hollywood studio has chosen an internet streaming player over a traditional cable channel.
“Actually, it doesn’t kick in until 2013, but it’s a very serious new move by Netflix to put very appealing content into their archive because one of the problems that Netflix has faced is that they have a lot of films and a lot of television shows but most of them are very old and lackluster.”
The company is hoping to soothe angry customers – one million of whom dropped the service after it jacked up prices a couple of weeks ago.
And its competition is ratcheting up.
Just Monday, online retailer, Amazon, announced a deal with News Corp’s Fox networks that will add more than 2,000 new titles to its $79 a year Prime instant viewing service. That compares to $96 a year, based on a per month subscription at Netflix.
Another big competitor to watch is Epix – a service backed by Paramount, Lionsgate and MGM – which is available through distributors including Verizon Fios and Dish. A blockbuster movie pass beefs up its services.
“They have 3,000 blockbuster movies, really better than anything Netflix can offer and they are also going to get major live events like Madonna’s upcoming concert next month in Brazil live on Epix streamed to whatever device you have.”
Some analysts, including Bibb, believe Netflix could soon find itself a takeover target, with likely buyers including Apple, Amazon, Yahoo! and Microsoft, attracted by the stock price that has been cut in half.
Bottom line: Netflix is doing damage control, unveiling its new Dreamworks Animation deal after losing its Starz affiliation and alienating customers with a raft of unpopular changes.