Terms weren't disclosed but knowledgeable sources told The Wall Street Journal it will be valued at several hundred million dollars annually. Bloomberg previously reported that Sony wanted as much as $250 million a year.
Netflix, based in Los Gatos, Calif., gets a crack at movies once they leave theaters and at Sony movies headed directly for streaming.
The number of films to which Netflix committed also wasn’t disclosed. The agreement takes effect for next year’s movies. Sony previously had a streaming deal with Lions Gate Entertainment’s (LGF.A) - Get Lions Gate Entertainment Corporation Class A Report Starz unit.
The deal enables Netflix to bring Sony’s film franchises and new intellectual property to the streaming network in the U.S. and "establishes a new source of first-run films for Netflix movie lovers worldwide,” Netflix’s head of global films, Scott Stuber, said in a statement to The New York Times.
Netflix recently traded at $552.77, up 1.1%. The stock has firmed 3% in the past six months. Sony American depositary receipts traded off 1% at $109.78.
Two weeks ago, Argus analyst Joseph Bonner upgraded Netflix to buy from hold, saying it’s "driving the future of entertainment.
"Netflix has risen from an ancillary business to which Hollywood would often unload rights for library content to become an industry powerhouse in its own right," he said.
Also last month, Netflix users took to social media to protest the streaming giant’s decision to forbid viewers from using passwords from households to which they don't belong.