Netflix Links Up With DreamWorks Again for More Kids' Shows
More kids' stuff for Netflix, this time via another DreamWorks Animation deal. — The Web video service will have exclusive worldwide first-run rights to a new batch of original programming from the studio …
Context & Ripple Effects
Netflix is extending a relationship that began with its 2011 streaming deal with DreamWorks into exclusive first-run originals. The move follows DreamWorks Animation's acquisition of AwesomenessTV, giving the studio a larger youth-oriented digital programming footprint as it commits new shows to a single global distributor.
Netflix had already demonstrated with House of Cards that exclusive programming can build customer loyalty, while its subscriber growth and heavy share of North American internet traffic gave it a large distribution base for a children’s slate.
First-order effects
- Netflix receives exclusive worldwide first-run rights to DreamWorks Animation’s new original children’s programming, strengthening a catalog segment that can differentiate its service.
- DreamWorks Animation gains a committed global outlet for a new batch of shows, tying part of its original-programming distribution more closely to Netflix.
Second-order effects
- Netflix’s exclusivity limits DreamWorks’ ability to license the same first-run shows to rival video services, making the studio’s deal terms and Netflix’s audience reach central to the value of the slate.
- DreamWorks’ AwesomenessTV acquisition gives the studio an additional youth-focused digital asset, increasing the strategic value of a distribution partner that can carry original programming worldwide.
Third-order effects
- If studios continue trading first-run rights for guaranteed global distribution, streaming services’ competitive advantage will shift further from licensed libraries toward exclusive programming relationships.
- The arrangement points to a children’s-video market in which studios increasingly pair production and digital-youth assets with a small number of subscription platforms that control audience access.
The trend: Subscription video is moving from nonexclusive catalog licensing toward global first-run exclusives that make programming partnerships a core retention tool.