Monday, June 17, 2013

Netflix To Premiere DreamWorks Animation's Branded Slate Of Upcoming New Original TV Series; Could DWA's Partnership With Nickelodeon Be Over?

Netflix Inc. has announced in the following press release, from PRNewswire, that the provider of on-demand Internet streaming media has signed a multi-year deal with DreamWorks Animation to make the Internet TV network the premiere home of new original series from the award-winning creators of global box-office hits including the "Shrek", "Madagascar", "Kung Fu Panda" and "How to Train Your Dragon" franchises, which may suggest DreamWorks' partnership with Nickelodeon may have ended.

Under DreamWorks Animation's partnership with Nickelodeon, Nick and DreamWorks have collaborated to bring the stars of popular DreamWorks movies to television screens by creating brand new Nicktoon shows based on the popular films. Under the joint deal, DreamWorks has made the popular animated Nickelodeon series "The Penguins of Madagascar", based on the popular "Madagascar" movie franchise, "Kung Fu Panda: Legends of Awesomeness", based on the hit "Kung Fu Panda" franchise, and "Monsters vs. Aliens", which is based on the movie of the same name.

Viacom recently allowed a deal the communications company held with the on-demand Internet streaming media provider Netflix to expire in May 2013, which ended an agreement that allowed the US-based netcaster to distribute shows from popular Viacom networks, including Nickelodeon, BET and MTV networks:
Netflix To Premiere DreamWorks Animation's Branded Slate Of New Original TV Series

Largest deal for original content in Netflix history will give members in the U.S., Canada, Latin America and Europe exclusive access to new original television series based on the studio's beloved franchises and characters

BEVERLY HILLS, Calif., June 17, 2013 /PRNewswire/ -- Netflix Inc. and DreamWorks Animation (Nasdaq: DWA) today announced a multi-year deal making the world's largest Internet TV network the premiere home of new original series from the award-winning creators of global box-office hits including the Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon franchises.

(Download Photo - Shrek and Donkey: )
(Download Photo - Turbo: )
(Download Image - Netflix Logo: )
(Download Image - DreamWorks Animation Logo: )

This agreement, which marks the largest deal for original first-run content in Netflix history, is also the first time DreamWorks Animation's beloved characters will be introduced into the television market as a branded collection of shows.

The groundbreaking deal, which encompasses over 300 hours of new programming, is a cornerstone of a major initiative by DreamWorks Animation to greatly expand its television production and distribution worldwide. The new shows will be inspired by characters from DreamWorks Animation's hit franchises and upcoming feature films as well as the vast Classic Media library, which DreamWorks acquired in 2012 and includes some of the most popular animated characters in history.

With the first series expected to begin airing in 2014, Netflix will premiere these new DreamWorks Animation shows in all the territories in which it operates.

"DreamWorks Animation is a valued partner in our global efforts to provide families the most engaging stories delivered however, whenever and wherever they want," said Netflix Chief Content Officer Ted Sarandos. "This deal represents a major expansion of what's already a phenomenal relationship, allowing us to bring beloved DreamWorks characters to the 40 countries where Netflix operates and setting the stage for us to innovate together as we expand into new markets."

"This is an unprecedented commitment to original content in the internet television space," said DreamWorks Animation Chief Executive Officer Jeffrey Katzenberg. "Netflix is a visionary company that continues to redefine the way audiences watch television and it is a thrill to add to their growing momentum."

In February, Netflix and DreamWorks announced their first ever Netflix Original Series for kids based on the highly-anticipated film Turbo, premiering on July 17. Turbo F.A.S.T, an episodic animated series which picks up with the speedy snail where the feature film left off, will be available in all Netflix territories beginning in December.

Also coming exclusively to Netflix in the U.S. and Latin America next year will be new DreamWorks Animation feature films, beginning with the global hit The Croods, which grossed more than $575 million at the worldwide box office, followed by Turbo and the big screen adaption of Mr. Peabody and Sherman, which opens in theaters in March of 2014.

Always commercial free, the content in the kids section of Netflix is curated in conjunction with ratings and reviews from Common Sense Media, a leading non-profit organization that provides independent, trustworthy ratings, reviews and information to help parents make great media choices. In addition to character-based selections, the service displays rows of TV shows and movies organized by easy-to-understand genres such as superheroes, princesses, dinosaurs and girl power. The unique Netflix technology provides each member with a personalized experience based on preferences and favorites.

About Netflix, Inc.

Netflix is the world's leading Internet television network with more than 36 million members in 40 countries enjoying more than one billion hours of TV shows and movies per month, including Netflix original series. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments. Learn more about how Netflix (NASDAQ: NFLX) is pioneering Internet television at or follow Netflix on Facebook and Twitter.

About DreamWorks Animation

DreamWorks Animation creates high-quality entertainment, including CG animated feature films, television specials and series and live entertainment properties, meant for audiences around the world. The Company has world-class creative talent, a strong and experienced management team and advanced filmmaking technology and techniques. DreamWorks Animation has been named one of the "100 Best Companies to Work For" by FORTUNE® Magazine for five consecutive years. In 2013, DreamWorks Animation ranks #12 on the list. All of DreamWorks Animation's feature films are produced in 3D. The Company has theatrically released a total of 26 animated feature films, including the franchise properties of Shrek, Madagascar, Kung Fu Panda, How to Train Your Dragon, Puss in Boots and The Croods.

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's plans, prospects, strategies, proposals and our beliefs and expectations concerning performance of our current and future releases and anticipated talent, directors and storyline for our upcoming films and other projects, constitute forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of DreamWorks Animation SKG, Inc. These risks and uncertainties include: audience acceptance of our films, our dependence on the success of a limited number of releases each year, the increasing cost of producing and marketing feature films, piracy of motion pictures, the effect of rapid technological change or alternative forms of entertainment and our need to protect our proprietary technology and enhance or develop new technology. In addition, due to the uncertainties and risks involved in the development and production of animated feature projects, the release dates for the projects described in this document may be delayed. For a further list and description of such risks and uncertainties, see the reports filed by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our most recent quarterly reports on Form 10-Q. DreamWorks Animation is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

SOURCE Netflix Inc.

Also, from Broadcast via Screen International:
Netflix strikes Dreamworks deal

Netflix has struck a landmark deal with Dreamworks Animation that will see it stream more than 300 hours of exclusive original programming from the Shrek and Kung Fu Panda producer.

The deal will see Dreamworks produce a string of spin-offs from current and forthcoming films for the international VoD service and could see new series featuring characters from Shrek, Monsters vs Aliens, How To Train Your Dragon and Postman Pat.

The move will be a blow to rival international kids broadcasters including Nickelodeon, which has produced kids series based on Dreamworks series including Madagascar and Kung Fu Panda, but will now be locked out of ordering future series as a result of the exclusive agreement.

The Netflix deal will also include potential series from characters including Casper The Friendly Ghost, Where’s Waldo and Postman Pat, taken from the Classic Media library which was acquired by Dreamworks last year.

The first series to come out of the deal could be a TV version of The Croods, based on the Neanderthal family, which was hinted at by Dreamworks chief executive Jeffrey Katzenberg in May.

The move follows Netflix’s order of a TV series based on Turbo from Dreamworks in February.

Netflix chief content officer Ted Sarandos said: “This deal represents a major expansion of what’s already a phenomenal relationship, allowing us to bring beloved DreamWorks characters to the 40 countries where Netflix operates and setting the stage for us to innovate together as we expand into new markets.”

The new shows will air across Netflix’s services in the US, Latin America, Canada, UK and Ireland, Scandinavia.
Also, from Screen Digest:
DreamWorks Animation kicks TV production into turbo

DreamWorks Animation (DWA) has committed to a major strategic shift, revealing a TV production slate worth $1bn as well as details of key licensing deals. The firm, which formerly focused largely on feature film production, such as Shrek and Madagascar, has slated 1,200 hours of TV shows to enter production over the next five years. DWA expects the shows to create an additional $100m per year in revenue on top of its existing TV sales. Netflix will be DWA's exclusive subscription television partner, pre-ordering 300 hours of the studio's output in a major multi-territory deal to encompass all of the platform's territories. A free TV deal with German kids' channel Super RTL will take 1,100 hours of the shows, and more territory-by-territory deals are imminent.

The multi-region Netflix deal covers the USA, Canada, Brazil, Mexico, multiple other Latin American territories, Scandinavia, the Netherlands, UK and Ireland. The first series created as part of the deal is scheduled for 2014, according to the platform. A precursor to this announcement was the series Turbo F.A.S.T., announced earlier this year as the first of Netflix's originated kids series, an episodic series adaptation of a DWA feature film along the lines of this new slate.

Classic Media, named as an important source of material for the new programming, became part of DWA a year ago in a deal worth $155m. It owns the rights to children's brands such as Caspar, Lassie, Postman Pat and Richie Rich.

Our Take

This is an important diversification by a major producer towards a 'substantial and consistent revenue generator', in the words of DreamWorks' senior management. Breaking that statement down reveals some important strategic underpinnings. In terms of substance, DreamWorks and Classic Media are sitting on a wealth of intellectual property capable of creating substantial revenue, but were previously without sufficient outlet among their partnerships to exploit those rights to the fullest. DWA's partnership with 20th Century Fox has proved useful for co-ordinating movie releases and shaping production costs, but the lack of a dedicated kids' TV channel from Fox has meant there was no obvious place to channel and monetise a TV series. Walt Disney, as a major competitor, was never a likely partner for TV deals, and while DWA has supplied TV series to Viacom-owned Nickelodeon and Turner Broadcasting's Cartoon Network, both companies have their own animation studios and would be unlikely to accommodate the large volume of DWA programming. The final option, of founding and running a proprietary cable channel, seems to have been less attractive in the near-term than this raft of rights deals.

Secondly, the term 'consistent' is key. DreamWorks historically was a film studio vulnerable to underperformance of new releases - in Q4 2012, it wrote off $86.9m costs for Rise of the Guardians. The company may well be looking to diversification to moderate quarter-on-quarter income fluctuations, which are undesirable from both a cash flow and an investor relations point of view. Having experimented with, among others, versions of Shrek and Penguins of Madagascar on linear TV, a large commitment to multiple strands and series of episodic TV will allow DreamWorks to scale up its production processes to reach the goal of consistent revenue generation. The Classic Media acquisition last year is key: DreamWorks revealed that 50 per cent of its 2013 TV series revenue will come from the Classic library, and it must be assumed that the new programming slate will also utilise characters from Classic's 3,600-hour library.

Exclusivity for a single online platform across multiple territories is an innovative move, but it also seems to have made financial sense for DWA. Management made reference to the 'full and fair value' received from the Netflix licensing agreement; presumably this sort of deal was equivalent in scale to any set of territory-by-territory subscription TV deals. It is even easier to see why Netflix benefits: as a complement to the platform's high-profile originations policy, these shows will help it further to distinguish its offering from competitors'. The purchase also ties in with Netflix's 'recognition factor' approach to unique content - for instance, bringing in name feature film talent such as the Wachowskis and David Fincher to make series; and leading with remakes/ reboots of already-popular programming, such as Arrested Development. Netflix will benefit from both the production values with a brand like DreamWorks Animation, as well as the sheer volume of hours - at 300, four times the amount of unique Netflix programming to date.

Countries: USA, Canada, Brazil, Mexico, UK, Ireland, Sweden, Denmark, Finland, Norway, Netherlands, Germany
Companies: DreamWorks Animation, Netflix, RTL, Classic Media