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Netflix’s announcement Tuesday that it has signed a multi-year licensing deal with the Walt Disney Company shook the entertainment industry, since it was the first time one of the major studios bypassed HBO, Starz and Showtime. The company’s chief content officer Ted Sarandos assured investors that the ambitious deal, which he called a “game changer,” would not cause the price of online streaming subscriptions to rise.
At the UBS Global Media and Communications Conference in New York Wednesday, Sarandos said that the $8 a month rate will not grow, notes Reuters. Recent content deals have made some investors nervous, especially since analyst Tony Wible estimated that the Disney deal will cost $350 million a year.
When the deal was announced, the companies did not release financial terms. The deal gives Netflix access to Disney’s theatrical releases before the pay-TV services starting in 2016, after Disney’s deal with Starz expires. Netflix subscribers already have access to Disney catalog titles.
Sarandos, who was interviewed by producer Harvey Weinstein, noted that the deal will boost the amount of animated features available to subscribers. “When we looked at the data of when we used to have Starz, the ones that constantly performed for us were those big animated features, lots of repeat viewing,” he said. “It's a nice, safe brand halo when you put your kid in front of an iPad.”
Starz also has an agreement with Sony, notes The Hollywood Reporter. When asked if Netflix was interested in securing a direct deal with Sony and the other studios, Sarandos said, “All are interesting” and that they are in talks with the other studios.
Sarandos also praised Disney as a “near-perfect media company,” thanks to its multiple brands like Pixar and Marvel. That also now includes Star Wars, since the company now owns Lucasfilm. He said that the talks with Disney started before Disney acquired George Lucas’ company.