FORTUNE -- Ask any parent who is a Netflix subscriber, and there's a good chance they'll tell you that the video-streamer is much stronger on kids' programming than on adult fare. The difference grows a bit starker with Netflix's new deal to run 300 hours of original animated programming from DreamWorks.
The deal will give Netflix (NFLX) exclusive, first-run rights to the programming starting in 2014 with shows based on characters from DreamWorks' (DWA) movies. Already in the works was a TV adaptation of the upcoming feature Turbo in December.
The agreement strengthens Netflix's positions in both kids' shows and original programming -- its biggest successes in the latter category being the series House of Cards and Arrested Development. Netflix last year announced that it had struck a deal with Disney (DIS) to provide theatrical releases from Disney, Pixar, and Marvel starting in 2016. Between that deal and the latest one, Netflix now has the two biggest animation studios in its stable.
Such deals, along with plans for more original programming, have pushed Netflix shares up by 244% over the past year. Today alone, the stock has risen by more than 7% as of midday.
Michael Pachter, analyst with Wedbush Securities, remains unimpressed. Netflix remains exposed to rising content costs, he notes. And that's true for original programming as for the rights to existing content. He notes that Netflix "does not own the rights to the underlying content, but instead agrees to fund a portion of the development costs in exchange for the rights to exhibit the content on an exclusive basis for a limited period of time. We continue to believe that Netflix's original content deals are costly, and although we believe that they will serve to add subscribers for the company, it is not clear to us that original programming will have a lasting benefit."
Pachter is hardly alone in his assessment. Netflix's highly uncertain prospects have made the company among the most hotly debated among investors, resulting in sometimes-dizzying volatility.
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* Netflix (NFLX) signed a deal with Dreamworks (DWA) that will allow the streaming service to exclusively serve up new movies as well as older content to users in 2013. The company reportedly outbid HBO -- Dreamsworks' previous home content supplier -- by paying an estimated $30 million per film. (GigaOm)
* Michael Arrington explains the MOREJP Mangalindan, Writer - Sep 26, 2011 3:30 AM ET
DreamWorks Animation CEO Jeffrey Katzenberg didn't mince words on the state of Hollywood. Plus, he told us which Pixar film was a "bad idea."
FORTUNE -- With summer in full swing and popcorn flicks like Captain America and Harry Potter opening with robust ticket sales, you'd think Hollywood execs would be beaming. But DreamWorks Animation CEO Jeffrey Katzenberg has some beef with his industry. According to Katzenberg, audiences are flocking to theaters, MOREJP Mangalindan, Writer - Jul 29, 2011 11:01 AM ET
Dreamworks CEO Jeffrey Katzenberg sat down with Fortune's Andy Serwer to discuss 3D technology, joining the Zynga board, and why movies suck this summer.
Below is an unedited transcript
ANDY SERWER: Good afternoon, again. Please join me in welcoming Jeffrey Katzenberg, who is, of course, the co-founder and CEO of DreamWorks Animation SAG. And you all know Jeffrey as a movie studio executive, but he's actually a lot more than that. He's MOREFortune Editors - Jul 19, 2011 8:12 PM ET
The bloom is off the rose for 3D, according to Dreamworks CEO Jeffrey Katzenberg. But it's not dead.
FORTUNE -- Speaking Tuesday at Fortune's Brainstorm Tech Conference in Aspen, Colorado, Katzenberg blamed the entertainment industry for the fact the 3D technology has yet to re-invent the movies. Executives driven by "that singular and unique characteristic that only exists in Hollywood, greed" tried to capitalize too aggressively without focusing on the quality, MOREJessi Hempel, writer - Jul 19, 2011 7:03 PM ET
A round-up of the companies, deals, and trends that made headlines.
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. We've assembled the day's most newsworthy bits below.
"AMD is not for sale, but we are happy to listen to any proposal which is in the interest to our shareholders." -- Dirk Meyer on Oracle's MOREJP Mangalindan, Writer - Oct 7, 2010 8:21 AM ET
>Jon Fortt - Jan 8, 2010 11:56 AM ET
At Dreamworks Animation, CTO Ed Leonard has to play well with others.
Top technology executives are no longer sitting at the corporate equivalent of the kids' table. The information technology leaders who gathered at Fortune's Infotech 40 forum at Brainstorm Tech have moved from supporting roles to star billing when it comes to helping their companies cut costs and execute strategy.
Ed Leonard, chief technology officer of DreamWorks Animation, (DWA) gets involved MOREStephanie N. Mehta, Deputy Managing Editor - Aug 17, 2009 11:45 AM ET
>Ben Baer, Senior Producer - Jul 27, 2009 4:20 PM ET
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