DreamWorks signs deal with Netflix

On Sept. 26, DreamWorks Animation, which has produced animated classics such as the Madagascar and Shrek series, signed a deal with Netflix to promote its films and television specials. It is the first time a major Hollywood supplier has chosen Web streaming over pay television.

According to some analyst estimates, the contract could earn the production house an estimated $30 million per movie. Under the deal, Netflix will begin distributing DreamsWorks’ titles in 2013 for an unspecified number of years. It replaces HBO’s similar deal with DreamWorks.

This new deal offers a small ray of hope for the content streaming company, which has suffered from a declining subscriber base and a resultant drop in stock prices in the recent past. Apple, Amazon and Vudu, Wal-Mart’s streaming service, have also been offering strong competition to the embattled company.

In fact the very day after Netflix announced its deal, Amazon also announced a licensing agreement with Fox. The contract allows Amazon Prime members to instantly stream a broad selection of popular movies and TV shows from the Fox library. These include Fox biggies such as The X-Files, Buffy the Vampire Slayer, 24, Arrested Development and The Wonder Years.

Another of Netflix’s key competitor, Dish Network, which plucked Blockbuster out of bankruptcy earlier in 2011, had launched a Blockbuster-branded streaming and DVD-by-mail service Sept. 23 to further tighten competition.

While it remains unlikely that Netflix can reclaim the dizzying heights of a $300 stock price, this new deal could provide some much needed relief to the content streaming company and lead to a revival in its fortunes.