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Netflix Vows to Maintain Current Streaming Prices

Stocks in this article: NFLX DIS

NEW YORK ( TheStreet) -- Netflix (NFLX) won't raise prices to pay for its major movie-licensing deal with Disney (DIS) announced yesterday, Chief Content Officer Ted Sarandos said.

Sarandos, speaking at a presentation during the UBS Global Media and Communications Conference in New York today, said Netflix's streaming pricing will remain $7.99 a month.

The Netflix executive described Disney as a "near-perfect media company," pointing, in particular, to the entertainment giant's successful Marvel business and its multiple TV properties.

"What we announced yesterday is a 'huge' leap forward for our program," he added. "Every month we stream a billion hours of content."

Under the terms of the deal, Netflix becomes the exclusive U.S. subscription TV service for first-run Disney live-action and animated feature films.

Kicking off with its 2016 theatrically released feature films, every new Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature titles will be made available for Netflix members to watch instantly. The agreement also includes direct-to-video new releases, which will be available on Netflix starting in 2013.

The two companies also clinched a multi-year catalog deal that brings movies such as Dumbo, Pocahantas and Alice in Wonderland to Netflix subscribers.

Financial terms of the deals weren't disclosed.

Media mogul Harvey Weinstein, who moderated Sarandos' presentation, described the Netflix/Disney partnership as "the biggest content deal, probably, in the history of our business."

"Disney is a game changer," added The Weinstein Co. co-chairman, highlighting the deal's broader impact. "It affects Starz, if affects the whole marketplace."

Weinstein asked Sarandos whether Netflix would ever offer its own entertainment show built around a celebrity such as Jon Stewart or Howard Stern.

"Like a 'Harvey Weinstein Presents' talk show?" quipped Sarandos, adding that Netflix is more focused on original content with a longer shelf life than, say, Stewart's The Daily Show. "As funny as it was last night, it's not as funny four months from now."

Sarandos nonetheless reiterated Netflix's commitment to producing its own content. "We are moving into more exclusive TV," he said, alluding to the House of Cards series, which will debut in February.

In total, Netflix has four original series in production that will go live in 2013, according to Sarandos.

Netflix shares, which closed up 14% on Tuesday after the Disney deal was announced, slipped 3.3% to $83.80 on Wednesday.

-- Written by James Rogers in New York.

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