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.
And it's a little like traffic school for the Internet.
By David A. Kaplan
FORTUNE -- Bruce Carlisle is a 55-year-old entrepreneur in the Bay Area. He's the founder of Conference Hound, a search platform for people attending business conferences. Last October, he was attending a big Bob Dylan concert in downtown San Francisco. As the show wound down, Dylan sang "Like A Rolling Stone." Carlisle impulsively took out his iPhone MOREMay 30, 2013 12:03 PM ET
Old-school DVRs are fighting to stay relevant in an era of add-on devices from the likes of Apple, Roku, and others.
By Peter Suciu
FORTUNE -- It used to be that families would gather around the living room TV during prime time to watch their favorite shows together. Even as the living room set has gotten bigger, the audience in front of it continues to shrink. Moreover families aren't watching together MOREMay 8, 2013 1:47 PM ET
The loss of hundreds of titles isn't slowing Netflix's momentum.
FORTUNE -- One of the most frequent complaints about Netflix (fair or not) is the supposed paucity of titles available for streaming. That complaint is about to get louder and more frequent because about 1,800 titles will be pulled because Netflix's (NFLX) licensing agreements for them are expiring today.
It's being called "The Great Netflix Purge" and "Streamageddon" (sometimes by the same MOREDan Mitchell, contributor - May 1, 2013 12:46 PM ET
Adding Internet streams of broadcast TV to the mix of options for viewers is yet another assault on cable's walled garden.
FORTUNE -- Now that Aereo has a new lease on life for its bizarre business model thanks to a court ruling Monday, the question arises: What is the company's end game?
Aereo streams broadcast television programs -- including news and sports -- over the Internet. The company argues that by creating MOREDan Mitchell, contributor - Apr 3, 2013 9:03 AM ET
A decade ago, Redbox was a tenuous experiment; its kiosks sold miscellanea from pantyhose to milk. Now, it has a shot at disrupting the king of web streaming.
By Kevin Kelleher, contributor
FORTUNE -- Reed Hastings must look at Redbox these days with a mixture of bafflement and envy.
Last summer, the Netflix (NFLX) CEO tried to introduce a new fee structure that most subscribers viewed as a price increase. A few months MOREFeb 10, 2012 10:52 AM ET
The company uses a mix of subscriber information, user ratings, rentals, and cool computer algorithms to predict what kinds of entertainment you might enjoy streaming.
Back to Reed Hastings: Leader of the packMichael V. Copeland, Senior Writer - Nov 18, 2010 12:00 AM ET
Executives from Silicon Valley to Hollywood to Wall Street admires his savvy persistence - and his company's cool culture. The secret to the Netflix CEO's success? He never stops looking over his shoulder.
Reed Hastings isn't supposed to be here -- not on a list of the year's top businesspeople, and certainly not on the cover of Fortune. His DVD-by-mail company, Netflix, was supposed to have flamed out by now, a MOREMichael V. Copeland, Senior Writer - Nov 18, 2010 12:00 AM ET
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