Disney Renews Netflix Deal

Walt Disney Co. (NYSE:DIS) on Monday announced multiple deals where it licensed digital copies of reruns of its content.

Disney renewed a two year old deal with Netflix (NASDAQ:NFLX) to stream its older shows that have previously been aired on ABC. In another deal Disney will allow Amazon.com (NASDAQ:AMZN) to stream old shows that will be available via Amazon Prime.

The Amazon agreement also includes some of the animated shows featuring Marvel characters, and it is possible that both the deals have slight differences. The Netflix release says that certain shows like the Grey’s Anatomy that are still on air will be streamed a month after the final episode of each seasons shown on TV. Amazon’s window length period was unknown.

However for an average viewer on Web video, this matter is going to mean the same: Both Netflix and Amazon are going to stream a collection of old ABC show. Few of the episodes will be from currently running TV shows, however from previous seasons, not reruns of this year.

For most of the online video streaming websites a licensing agreement is now standard. The studious and networks are quite happy in selling their shows to digital distributors as long as they are a bit old. It has generally found money, and will fall straight to Disney’s bottom line, similar to deals at News Corp.’s Fox, Comcast’s NBC, etc. the networks are discovering ways how to sell the same matter again and again, like Disney’s deal with Netflix and Amazon, or agreements reported earlier this month to stream CW Network shows on Hulu and Netflix, which could generate over $1billion revenue to owners Time Warner and CBS.

The deals show that Amazon continues to slash into the lead that Netflix has built up in Web video catalog. Netflix is moving towards a new strategy, where it pays a premium for stuff that is not available anywhere on the Web. However it cannot fill its 20,000 catalogue alone with exclusives. In this deal at least it does not seems like Netflix has carved out any exclusives.

Netflix last week announced a surge in earnings by 65 percent in the third quarter, a big jump in revenue. However, the company predicts weak fourth quarter figures. Netflix shares are down by more than half in 2011 after failed strategies to increase the price and plans to isolate its online streaming and DVD websites. Meanwhile, Amazon announced that its third fiscal quarter earnings plunged 73 percent as a result of expensive spending program.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.