Netflix renews contract for NBCUniversal movies and TV

@CNNMoneyTech July 13, 2011: 1:47 PM ET

NEW YORK (CNNMoney) -- One day after unveiling a new pricing plan that will force many customers to pay more for streaming video or stop receiving DVDs by mail, Netflix issued an announcement aimed at reassuring them that its streaming video catalog will remain well stocked.

The company has secured a "multi-year renewal" of its contract with NBCUniversal, Netflix said Wednesday. The deal will make more of the studio's film and TV titles available to stream instantly.

The arrangement lets Netflix (NFLX) offer access to past seasons of shows from various NBC networks, including "The Office" and "30 Rock." All future seasons of those shows will be available to Netflix on a one-season delay basis. Select Universal Pictures movies will also be available.

Financial terms of the deal were not disclosed, nor were the number of years in the contract.

Back in April, Wedbush Securities analyst Michael Pachter forecast that the cost of Netflix's contract for NBCU TV and films would jump massively -- from about $22 million per year in 2010 to about $275 million per year upon renewal.

It's part of a larger trend that spells trouble for Netflix. As streaming video gets more popular -- and competitors like Amazon (AMZN, Fortune 500), Hulu and Redbox (owned by Coinstar (CSTR)) grow more aggressive in challenging Netflix -- studios are in the power position. They want to be paid more for the content they're providing.

Netflix's vanished Sony films are an ominous sign

Overall, Pachter predicts Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012.

That trend helped drive Netflix's decision this week to split its DVD and streaming subscription plans and charge customers separately for each. The cheapest DVD plus streaming option will now cost $16 a month, a sharp jump from the $10 Netflix currently charges.

That move pleased Netflix's shareholders, but made its customers irate. Netflix's Facebook page attracted more than 28,000 comments as of Wednesday morning, most of them critical of the move, and thousands more vented their displeasure on Twitter under the #DearNetflix hashtag. To top of page

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