Netflix to stream Relativity movies

Deal reflects shift in distribution away from pay TV channels

Netflix has secured rights to stream up to 30 Relativity-produced movies during the traditional pay-TV distribution window.

Known mostly for online rentals of DVDs mailed to subscribers, Netflix also offers digital rentals of films and other content. Its deal with Relativity will make new releases available for subscriber streaming immediately after the DVD release window and much earlier than would be possible under some other Netflix streaming agreements.

Netflix has streaming deals with all the major studios. But only its Sony and Disney arrangements allow for the streaming of movies during the pay-TV window, via rights granted by Starz as part of Sony's output agreement with the the cable programmer.

By contrast, HBO has granted no such arrangement on Warner Bros. movies, so Netflix gets those titles a whopping nine years after their initial release.

Netflix similarly gets new titles from other majors several years into their post-theatrical distribution cycles, though it does get new releases from a handful of indies.

Initially, Netflix's deal with Relativity will apply to the estimated 10-12 pics per year that Relativity wholly produces. But Netflix has agreed to accommodate up to 30 titles annually for at least the next five years.

"Traditionally, these films have flowed through Relativity's studio releasing partners to output deals with premium TV channels," the companies said Tuesday.

Universal, Sony and other co-production partners handle DVD, Blu-Ray disc and digital distribution on most of the film projects in which Relativity invests.

Netflix and Relativity suggested the agreement reflects a paradigm shift in ancillary movie distribution away from pay-TV channels. "The deal marks a continued shift in the distribution of major motion pictures in the U.S.," the companies said.

Upcoming Relativity productions to be covered under the deal include Paramount's boxing drama "The Fighter" and dramatic thriller "Skyline" from Universal. Set for 2010 theatrical releases, the pics will be available for streaming on Netflix in early 2011.

"Our continued goal is to expand the breadth and timeliness of films and TV shows available to stream on Netflix," Netflix chief content officer Ted Sarandos said.

"We have always been about finding new ways to grow and monetize our business," Relativity chief Ryan Kavanaugh said. "This clearly is a natural step in the evolution of the movie business and opens up a whole new world of revenue and marketing opportunities."
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