Audio Video News

In a deal said to be the first of its kind, online DVD rental service NetFlix has entered revenue-sharing agreements with Columbia Tristar and Warner Home Video. The agreement, announced December 7, will allow NetFlix to buy movies in larger quantities and at deeper discounts than previously. NetFlix is the first DVD Internet dealer to have a revenue sharing agreement with major motion picture distributors.

Based in Los Gatos, CA, the rapidly-growing NetFlix stocks more than 9000 DVD titles and has a subscriber base of 250,000 members who pay $19.95 a month for its popular unlimited movie rental service. The deal with Warner and Columbia Tristar will help fuel new growth, NetFlix executives said. "We are extremely pleased that these major studios recognize NetFlix as an important distribution channel for their content," said Reed Hastings, co-founder and CEO of NetFlix. "With these revenue-sharing deals, we can continue to deliver on our promise to provide the best movie experience possible—giving our customers the titles they want, when they want them, and allowing them to enjoy the movies for as long as they like. The agreements also help us keep pace with our extraordinary growth, without compromising our quality of service."

Warner Home Video president Warren Lieberfarb was equally enthusiastic. "DVD is the entertainment format of the future and NetFlix is our fastest growing customer for DVD rentals," he said. "We look forward to working with NetFlix to expose the DVD viewing audience to Warner's vast library of films."

"We are very excited to be working with NetFlix," said Steve Lyons, Columbia Tristar Home Video vice president of sales. "We entered into a business relationship with NetFlix because they have developed outstanding relationships with DVD viewers, many of whom are knowledgeable about film and looking for new ways to enhance their movie viewing experience. We believe that NetFlix is the way to introduce movie lovers to our films."