On Thursday, Netflix (NASDAQ:NFLX) and Sony Pictures Entertainment announced an exclusive, multiyear film licensing deal. This new agreement replaces Sony Pictures’ deal with the premium cable network Starz to make all new Sony releases exclusively available on Netflix after hitting the theatres.
Amid intensified competition in the streaming market, Sony has remained the only major film studio without an associated streaming service. While entertainment companies such as Disney or Paramount built in-house streaming programs, Sony will follow a supplier strategy.
The deal will come into effect 2022 and entails new releases as well as continuations of crowd favorites such as “Spider-Man” or “Jumanji”. Although financials were not disclosed it is estimated to be worth $1 Billion over a 5-year period, ending in 2026.
Netflix will also be granted a right of first refusal for all of Sony’s movies that are intended to directly go to streaming. This contingent will be on top of the 15-20 movies Sony plans to release in theatres per annum.
Keith Le Goy, President of Distribution and Networks at Sony Picture Entertainment, highlighted that “this exciting agreement further demonstrates the importance of [Sony’s] content to our distribution partners”.