Netflix Lost Star Wars 13 Months Ago
Netflix (NASDAQ: NFLX) just can't catch a break. The DVD rental and streaming video giant has endured more setbacks than all of its competitors combined. While Amazon (NASDAQ: AMZN) brags frequently about the addition of new content for Amazon Prime, Netflix is still reeling from the loss of Liberty Media's (NASDAQ: LMCA) Starz.
Up until 2011, Starz had an unusual partnership with Netflix. Per the terms of their agreement, Netflix was able to stream Starz content (including new films) to its own users. This gave the streaming video site access to content from Sony (NYSE: SNE) and Disney (NYSE: DIS).
When Starz announced that it would not renew its contract with Netflix, the service lost a plethora of big films, including Toy Story 3 and The Social Network.
By the time The Avengers was released and became the biggest film of the year, Starz had already moved on. Netflix attempted to compensate for the loss by signing a multi-year contract with DreamWorks Animation (NYSE: DWA).
Meanwhile, Disney found a new home to stream its prized movies: Amazon Prime. In September, Amazon announced that it had signed a deal with EPIX that will allow it to stream films from Disney, MGM, Lionsgate (NASDAQ: LGF) and Viacom's (NYSE: VIA) Paramount Pictures. Thus, if consumers want to stream The Avengers and The Hunger Games, they will have to sign up for Amazon Prime.
If Netflix thought 2012 could not get any worse, then it must not have been prepared for yesterday's announcement. Disney acquired Lucasfilm -- and the entire Star Wars franchise -- from George Lucas for $4 billion. The studio will conclude the first Star Wars saga with three new films, along with new TV shows (including a series on Disney XD), video games and merchandise. Disney has hinted at additional theme park attractions, as well as additional Star Wars films that are separate from the primary saga.
This is potentially huge for Amazon, which may now be able to add the three Star Wars trilogies to its streaming video service.
For Netflix, this news is more depressing than receiving an apple instead of candy on Halloween. While the site could have benefited from the production of new Star Wars films, Netflix no longer has the ability to stream content from Disney.
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