Netflix signs pay TV deal for Dreamworks animation (Reuters)

(Reuters) – The online video rental company Netflix Inc. said it has won the pay TV rights to the Dreamworks animated film from 2013, the first time a major Hollywood studio has chosen a player on the Internet on a continuous Traditional cable channel.

The news of the contract led Netflix stock up nearly 7 percent to a maximum of $ 137.88 in early trade Monday on Nasdaq.

Netflix did not disclose the financial terms of the agreement.

However, DreamWorks CEO Jeffrey Katzenberg told the New York Times that the agreement, worth $ 30 million for Dreamworks picture on a number of years, was "changing the game" and represented a bet that the the public will soon make a distinction between content on the Internet or cable.

The agreement will allow Netflix Dreamworks – the studio behind the family, the degree of "Shrek" and "Kung Fu Panda" – is to avoid pay-television HBO on-line transmission, reported Times. HBO is a unit of Time Warner Inc.

"We are starting to see a roadmap to long term where the industry is heading," was Katzenberg said that the newspaper in an interview.

The deal comes days after Netflix content, which has seen prices fall sharply after the influence of a series of errors, struck an agreement to broadcast television, Discovery Communications Inc.

Netflix to add more content to its streaming service to support the development of new customers and fend off competition from the likes of Amazon.com Inc., Google and Apple Inc.

The actions of the former darling of Wall Street has fallen 50 percent in two months.Netflix CEO Reed Hastings has apologized for not moving enough to explain, from an astonishing price rise in July to a separation of its DVD-mails from streaming services and the company tries to win back customers.

However, adding customers are suddenly hard, with Netflix on the receiving end of heated complaints from customers are still upset about the price increase was announced in July.

It lowered its subscriber forecast by 1 million, said it now expected to get 24 million subscribers by the end of the third quarter. Last time, Netflix reported a decrease in subscribers during the second quarter of 2007 when Blockbuster was aggressively driving a DVD rental package called Total Access.

According to the Times Netflix was quick to pump up the Dreamworks deal.

"This is one of the few brands family entertainment that matter," was the Chief Content Officer Ted Sarandos said."There is also a signal to people that we in no way a departure from films. Our programming is simply more and more people think about it."

(Reporting by Edwin Chan in Los Angeles and Supantha Mukherjee in Bangalore, Editing by Peter Cooney, Viraj Nair)