Netflix Inc. is taking a swipe at the pay-TV business by freshening the content on its streaming-video subscription service in Canada.
The company announced Monday a multiyear deal with Paramount Pictures for the rights to show all of the studio's new releases in Canada before any television channels. It is the first exclusive deal for newer content on Netflix in Canada.
The service has generally been known for filling its library with movies and television shows that are well past their initial airing dates. This deal gives it the right to show Paramount movies during the window of time when they would normally appear on pay television - after theatres, hotel pay-per-view, airplanes and DVD releases, but before they reach television stations such as CTV or CBC.
"Traditionally, those [pay-TV]outlets have received first-run movies or new releases. Netflix is changing all that," spokesperson Steve Swasey said in an interview.
The deal adds roughly 350 films to the Netflix selection for Canadian customers, beginning with Iron Man 2. The company does not disclose the total number of titles available here, though Mr. Swasey said it has increased considerably from the 7,000 movies and TV shows available when it launched in Canada last September.
"Windows [of availability]are changing, along with technology, and obviously Netflix is a part of that," said Brett Harriss, an analyst with Gabelli & Co.
Netflix's strategy has centred on steadily increasing the content offered to subscribers, who pay a flat fee of $7.99 per month in Canada. That allows unlimited streaming of video over an Internet connection to computers and other Web-enabled devices such as gaming consoles.
Some of the owners of that content, however, have been reluctant to sign deals for their newest releases. Warner Bros. Entertainment Inc. is experimenting with bypassing such online distributors as Netflix and Apple Inc.'s iTunes by offering a handful of its movies for rent directly on the Facebook social networking site. Pay-TV juggernaut HBO has so far refused to do business with Netflix at all, even for older hits such as The Sopranos.
That's because original television shows - not movies - are the bread and butter of pay television, Mr. Harriss said. "HBO made that move a long time ago, and now Showtime. The old pay-box model of buying the output from one studio for a certain period, that's been under pressure for some time," he said. "Netflix just exacerbates that."
Netflix is also buying its own original content. This month the company announced its first exclusive deal for a television series, starring Kevin Spacey. The one-hour drama House of Cards is produced by David Fincher, director of Oscar-winner The Social Network. Netflix will have exclusive rights to show at least 26 episodes of the series, beginning late next year.
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