Netflix to add more streamed movies

By Dow Jones Newswires
Posted Sep. 8, 2010 at 2:25 p.m.

Netflix Inc. has reached an agreement to license first-run theatrical movies distributed by Nu Image/Millennium Films for online streaming during the “pay TV window,” when they’re usually available on premium TV channels.

Shares rose 3.11 percent, to $146.20, in late afternoon trading. The stock has more than doubled so far this year. 
Financial terms weren’t disclosed. The film companies said they would supply the monthly-fee movie-rental company with five to 10 films a year, generally a few months after their release on DVD. The film industry has employed a strategy of delaying releases to online platforms in order to protect its traditional theatrical and DVD revenue streams.

Nu Image/Millennium are known for action and thriller films including “The Expendables” and “Brooklyn’s Finest.”

Netflix faces growing competition from companies like Redbox, a unit of Coinstar Inc.  Some analysts say that as more users move to streaming, Netflix is in danger of earning less from each subscriber, particularly as new subscribers appear to want its cheapest service, raising pressure to add even more subscribers.

Netflix in July said its second-quarter earnings jumped 34 percent but warned it wouldn’t be able to repeat the performance in the current quarter, despite surging membership. Netflix executives highlighted the growing popularity of streaming, saying 61 percent of customers opted for it in the second quarter, up from 55 percent in the quarter earlier.

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