Netflix put out two major pieces of news this week, that it has signed its largest ever original content deal with DreamWorks Animation, and that it will launch late this year in yet another country, the Netherlands.
Netflix is really trying to beard the Lion in its den with its Netherlands launch, going after the core market of one if its harshest critics in Liberty Global. The CEO of Liberty Global, Mike Fries, has stood up at various cable conferences and talked with open derision about the Netflix business model.
The Netherlands is a perfect targets from the Netflix point of view, since it is one of only two European countries that already has a Net Neutrality law ‘ so the major broadband suppliers in Liberty Global, Ziggo and KPN, will not be allowed to arbitrarily squeeze Netflix streams to make the service unattractive to customers. They can use normal traffic shaping policies, but will not be able to treat Netflix differently from any other video stream under Dutch law.
Netflix said that its critically acclaimed Netflix Original Series such as “House of Cards” and “Arrested Development” will be available immediately on launch on tablets, phones, TVs, game consoles and computers. It is asking customers to pre-register their email addresses now.
The Netherlands has a population of 16.7 million, in 7.2 million TV households, in a country with over 100% penetration of pay TV, with 64% of it being cable. KPN is the dominant broadband player with 2.7 million broadband lines, compared to 1 million at Liberty and 1.77 million at Ziggo.
The deal with DreamWorks Animation will including new sure fire box-office hits such as Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon franchises. What DreamWorks will do is create TV series for each of these franchises and offer them first on Netflix. The deal involves 300 hours of new content, and comes as part of a DreamWorks Animation move to get heavily into TV, from the big screen.
It looks to us that this deal was bounced around from broadcaster to broadcaster and Netflix came up with the best price, for what are potentially unknown TV series, even if they are based on popular movie characters. Netflix has also landed access to the vast Classic Media library, which DreamWorks acquired in 2012 and includes some of the most popular animated characters in history. The first series will begin airing next year, and Netflix will get first crack at these 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.’
In February, Netflix and DreamWorks announced their first ever Netflix Original Series for kids based on the highly-anticipated film Turbo, premiering in July. The series will hit all Netflix territories in December.
Netflix has also landed an exclusive first showing in the US and Latin America next year of new DreamWorks Animation feature films, beginning with The Croods, a movie which has already grossed $575 million at the box office.