The Daily Collegian
Netflix, Inc. pays
The company will now be streaming Paramount, MGM and Lionsgate movies
By Michael Lledtke
and Ryan Nakashima
ASSOCIATED PRESS WRITERS
LOS ANGELES Netflix Inc.
will pay nearly $1 billion during the
next five years for the online
streaming rights to movies from
Paramount, Lionsgate and MGM
in a deal that could help convert
even more people to the idea of
getting their entertainment piped
over high-speed Internet connec
tions.
The agreement announced
Tuesday marks another break
through in Netflix’s bid to stock its
online streaming library with
more compelling material, so it
can keep its subscription service
relevant as on-demand video sys
tems supplant its core business of
renting DVDs through the mail.
The online streaming push also
helps the company reduce its
postage bill for mailing DVDs.
The deal also makes the three
studios’ joint pay TV venture,
Epix, immediately profitable.
Streaming movies provide more
instant gratification than renting
DVDs through the mail or from a
store because the video can be
delivered within 30 seconds over a
high-speed connection. The video
isn’t stored on the computer hard
drives owned by subscribers; it’s
Levi Johnston to star in reality show, run for mayor
By Becky Bohrer
ASSOCIATED PRESS WRITER
JUNEAU, Alaska
Playgirl t 0... politico?
That’s right: Levi Johnston’s
manager, Tank Jones, is confirm
ing a report that Johnston is plan
ning to run for city office in his
hometown of Wasiila, Alaska, as
part of a reality TV show.
Wasiila is where Sarah Palin got
her start in politics, moving up
from City Council to mayor before
winning election as Alaska’s gov
ernor in 2006.
Palin rose to stardom in 2008
when she was chosen to be the
vice-president nominee for the
Republicans.
Johnston, 20, is the father of
Palin’s grandson, Tripp, and the
recently off-again flame to her
fir
Coiisi;
ARTS & ENTER!
just shown on a connected device,
such as video game consoles. The
concept has become more popular
as more households have gotten
high-speed Internet access and
Netflix has obtained the stream
ing rights to more recent movies
and TV shows.
Analysts believe the influx of
newer movies available for
Internet streaming will enable
Netflix to maintain its rapid
growth of the past two years, lift
ing its earnings even higher
despite the hefty licensing fees.
That expectation helped lift
Netflix shares $B.ll, or nearly 7
percent, to close at $125.01.
Netflix’s stock price has
quadrupled during the last two
years as the number of the com
pany’s subscribers has nearly
doubled to 15 million. Meanwhile,
traditional video stores have been
closing, a trend reflected by the
collapse of Movie Gallery Inc. and
the struggles of Blockbuster Inc.,
whose shares are worth so little
now that they were recently de
listed from the New York Stock
Exchange.
Epix, a pay TV channel
launched last October by Viacom
Inc.’s Paramount, Metro-
Goldwyn-Mayer Inc. and Lions
Gate Entertainment Corp., holds
subscription pay TV rights to new
daughter Bristol, who recently
began an ad campaign in promot
ing abstinence for unmarried
teens.
Jones said Johnston is serious
about a run, either for mayor or
City Council.
“Let me put it to you like this: If
you live in a town and things are
happening in that town, and you’re
displeased with it, what do you do?
You try to change those things,”
Jones said.
He declined to give specifics on
what Johnston wants to change
but insisted the run is real.
“This is not a spoof. This is not a
joke,” Jones said.
According to the Wasilla city
clerk, the next mayoral election is
in 2011. The candidate filing period
for council elections this October
closed July 30.
BRUA
1 billion for rights
releases and movies from its part
ners’ libraries. The pay TV rights
typically start about a year after a
movie’s theatrical release. Netflix
is getting the rights to stream
movies 90 days after they appear
on Epix, which is offered through
subscription TV providers such as
Dish Network Corp. and Cox
Communications Inc.
The first crop of movies to be
released in Netflix’s streaming
library on Sept. 1 include “G.I. Joe:
The Rise of Cobra,” “The Pink
Panther 2” “The Curious Case of
Benjamin Button” and all of “The
Godfather” movies. Over the next
few months, “Iron Man 2” and
“Star TYek” will also be available
for streaming.
The movies will be available for
streaming on Netflix for 16 or 17
months, after which the rights will
shift to basic cable channels.
Netflix now has movie stream
ing rights that cover about 46 per
cent of new releases at the U.S.
box office, said Ted Sarandos,
Netflix’s chief content officer. He
says that’s comparable to what
Time Warner Inc.’s HBO gets for
its pay TV channel.
“We are giving people more and
more reason to stream instead of
waiting to get their DVDs through
the mail,” Sarandos said.
Just over 60 percent of Netflix's
Chris Pizzelio'Assoc.ater! Pres;
Levi Johnston arrives on the red carpet at the Teen Choice Awards.
Johnston isn’t listed among ment. Johnston has seemingly
those candidates. come to embrace the spotlight
Wasilla’s outspoken current since first being thrust into it in
mayor, Verne Rupright, was at a 2008.
meeting Monday and didn't imme
diately return a call seeking com-
Netflix has gained popularity the past years, reaching large audiences,
subscribers streamed at least 15
minutes of video in the April-June
period, up from 36 percent at the
end of last year.
Mark Greenberg, the president
of Epix. told The Associated Press
that the channel had discussed a
digital distribution deal with many
potential partners including the
online video site Huiu,
Amazon.com Inc., and Google
Inc.'s You Tube, but the Netflix
deal marie the most sense
because it had healthy subscriber
revenues.
Amid Palin's bid for rice presi
dent alongside Senator John
Wednesday, Aug. 11, 2010 I 5
"We're putting our bet on
Netflix. They've done a great job
and they're a great brand,”
Greenberg said.
Mailing DVDs remains Netflix’s
bread and butter, so the Internet
isn't in immediate danger of chok
ing from Netflix' expanded online
streaming. Still, it represents the
company’s growth engine. Netflix
management believes the stream
ing service is the main reason
Netflix has added more than 6.5
million subscribers in the past two
years.
McCain, Johnston and Bristol
were unwed teenagers expecting
a child together.
Since then, he's gone on to pose
for Playgirl and appear with Kathy
Griffin on her reality show.
On Sunday, he walked the red
carpet at the Teen Choice Awards
with singer Brittani Senser, with
whom he agreed to shoot a music
video.
Asked whether he believed peo
ple would take Johnston’s run for
office seriously, with TV cameras
rolling, Jones said: “People ques
tioned Jesus Christ, so I definitely
don't care about these mere mor
tals questioning Leri Johnston.
“People can question whatever
they want. I mean, he’s going to
keep on doing his thing,” he said.
"He was going to do this, even if
this wasn’t a reality show.”