Netflix and DreamWorks Animation fortify alliance

Netflix is strengthening its ties with DreamWorks Animation as the Glendale studio looks to become more of a player on the small screen.

The companies announced Tuesday they were expanding their partnership, making Netflix the global home to several new original series from DreamWorks Animation, best known for its “Shrek,” “Kung Fu Panda” and “Madagascar” movies.

Financial terms were not disclosed.

But in a statement, Netflix said it plans to launch several new series produced by DreamWorks Animation in the coming year, including a children’s series, “Trollhunters,” from Guillermo del Toro, and a reimagining of the ‘80s animated series “Voltron.”

The deal extends — by an unspecified number of years — Netflix’s rights to stream such DreamWorks series as “The Adventures of Puss in Boots” and “Dinotrux” in markets around the world, except China. Based in Los Gatos, Calif., Netflix operates in more than 60 countries. The pact also gives Netflix streaming rights to DreamWorks movies.

Children’s programming has become increasingly valuable to Netflix and other streaming services that
are competing for subscribers.

“It’s with great pleasure that we expand on an already successful relationship with DreamWorks Animation to bring more premium kids and family television to Netflix members globally,” Cindy Holland, vice president of original series for Netflix, said in a statement.

For DreamWorks, Netflix provides an important distribution platform for the studio at a time when more consumers and their families are watching entertainment on new platforms.

Investors, who had been concerned about whether Netflix would end its deal with DreamWorks by 2018, welcomed the news. DreamWorks shares closed Tuesday at $24.98, up 99 cents, or 4%.

“DreamWorks’ TV effort has been reinvigorated by the Netflix deal, enabling it to build one of the largest TV production studios,” James Marsh, an analyst with Piper Jaffray & Co., wrote in a research note.

The pact expands a landmark deal announced in 2013, when DreamWorks signed a multiyear agreement to produce 300 hours of original programming for Netflix.

DreamWorks, which co-owns with Hearst Corp. the YouTube teen network Awesomeness TV, has been ramping up its television business to lessen its reliance on the performance of movies. Last year, the studio cut 500 jobs and overhauled management because of a string of misses at the box office.

The studio’s television business, however, has been a bright spot, generating an estimated $250 million in revenue last year.

Last month, the studio said it was getting into the business of producing live-action television shows based on its original characters and those from the
Classic Media library, which it acquired in 2012 for $155 million, securing the rights to Lassie, Waldo, Casper
the Friendly Ghost and
hundreds of other characters.

With the new Netflix deal, DreamWorks has commitments to produce more than 1,600 episodes of television for linear and video-on-demand platforms.

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