SAN FRANCISCO (AP) Netflix's video subscription service has trumped pay-TV channels and grabbed the rights to show Disney movies shortly after they finish their runs in theaters.
The multiyear licensing agreement announced Tuesday represents a breakthrough for Netflix as it tries to add more recent movies to a popular service that streams video over high-speed Internet connections. Netflix says the deal with make it "the exclusive U.S. subscription television service for first-run live-action and animated feature films from The Walt Disney Studios."
Investors applauded Netflix's coup, lifting the company's stock by $7.65, or more than 10 percent, to $83.65 in afternoon trading.
It's the first time that one of Hollywood's major studios has sold the coveted rights to Netflix Inc. instead of a premium TV network such as HBO, Starz and Showtime. DreamWorks Animation SKG Inc. licensed the pay-TV rights to its movies to Netflix last year under a deal that begins in 2013, but those movies don't wield the same box-office appeal as Disney, whose stable includes Pixar Animation and Marvel.
Starz currently holds the rights to The Walt Disney Co.'s movies under a deal that expires in 2015.