Netflix,
Inc.(NASDAQ:NFLX) shares soared 15% to $87.39, its highest price since late
April as soon as it declared its deal with The Walt Disney Company(NYSE:DIS).
Netflix will be
streaming Disney movies in the ‘pay TV window’ from the year 2016. That is
applicable for the time when a movie becomes available for sale or rent. It is
normally the time when HBO gets movies.
For a long time, movie
companies had been preventing Netflix from getting movies quickly. The notion
is to make tiers of pricing. For example, one needs to pay $5 to see a movie in
the theatre. He needs to pay $5 to rent it after a few months. Months after
that, if he is paying subscription fees to HBO, he gets the chance to see it
for free of cost.
Also, Netflix is about
to get access to Disney’s huge library of movies. Netflix is already doing a
great business serving up movies and shows meant for children.
Screenwriter Arash Amel
has tweeted in context to why this news is a big deal that the Disney Netflix
agreement is a legendary moment in the history of movie windows in the US and
it marks the end of pay-TV monopoly age.
The contract places
Netflix on more even footing with Showtime, HBO and others.
According to the
release, Disney and Netflix have agreed upon a multi-year catalog deal that
brings Netflix members in the US Disney movies like Alice in Wonderland, Dumbo
and Pocahontas.
Chief Content Officer
of Netflix, Ted Sarandos said that both the companies have shared a long and
mutually beneficial relationship. The deal will get some of the top-notch,
imaginative family movies in the first pay TV window to the subscribers. He
thinks that it is a bold move for the internet television and Netflix is proud
of being teamed with Disney.
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