Netflix has signed a long-term agreement with Relativity Media to stream first-run films from the movie studio and financier, the companies said Tuesday.
The deal will allow Netflix subscribers to stream the movies online a few months after their DVD releases but during what is traditionally known as the "pay TV window."
Relativity, the studio responsible for "Get him to the Greek" and "Grown Ups," says it produces or finances 20 to 30 new movies each year. The first of its films to be made available through Netflix streaming will be "The Fighter" and "Skyline," both of which are due for their theatrical releases early next year.
The deal might seem like a win for Netflix, which is increasinglyas consumers start to shift away from renting movies on discs and instead look to access them instantly and on demand via the Web. However, just how much the agreement will cost Netflix isn't clear. And the established progression of movies from theaters to DVD to pay TV channels has proved to be difficult (and expensive) to break into, largely because pay TV companies offer top dollar for licenses to newer films--licenses that can last years. This has left Netflix's streaming service with limited offerings that mostly consist of older movies and TV shows.
It's also not clear whether Netflix will get rights to stream these movies before the pay TV companies get to show them. A Bloomberg report suggests that Netflix's exclusive deal would kick in after some period of pay-per-view availability. Netflix did not immediately respond to a request for comment.
For its part, Relativity seems positive about adopting a new, modern distribution channel. "We have always been about finding new ways to grow and monetize our business," Relativity CEO Ryan Kavanaugh said in a joint statement. "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. Kavanaugh noted the deal "marks a significant change in [the film] industry."