DreamWorks, Netflix in streaming rights talks

DreamWorks Animation SKG Inc is in talks to offer Netflix Inc exclusive streaming rights to its films after a pay-TV accord with HBO expires, a person with knowledge of the situation said.

An agreement may be reached as soon as this week, said the person, who declined to be identified because the discussions are continuing. Both companies plan to report quarterly results this week and have scheduled conference calls with investors.

An exclusive accord would underscore the growing importance of Internet streaming to studios, which have seen US DVD sales tumble. DreamWorks Animation, maker of the Shrek films, is bound to Time Warner Inc’s HBO through a contract that expires in 2014, according to a February 25 regulatory filing by the Glendale, California-based company. Shannon Olivas, a spokeswoman for DreamWorks Animation, declined to comment, as did Steve Swsasey, a spokesman for Netflix.

Netflix, based in Los Gatos, California, raised prices by 60 per cent this month for US subscribers who want both mail-order and streaming services, citing the costs to acquire and deliver films and TV shows. The company’s more than 23 million subscribers will pay $15.98 monthly beginning September 1 if they choose both options or $7.99 for just one.

DreamWorks Animation, led by Chief Executive Officer Jeffrey Katzenberg, announced in March its release plans for films scheduled through 2014. They include Puss In Boots in November, Madagascar 3 and Rise of the Guardians next year, three films in 2013 and two in 2014.

Since 2007, Netflix CEO Reed Hastings has increasingly focused on delivering movies and television shows via the Web to televisions, set-top boxes and mobile devices. Those include Microsoft Corp’s xBox player and directly to some TV sets.

DreamWorks Animation rose 18 cents to $21.05 on July 22 in Nasdaq Stock Market trading. The shares have declined 29 per cent this year.