UPDATE 1 Disney, Netflix sign exclusive TV distribution deal

Tue Dec 4, 2012 3:09pm EST

Dec 4 (Reuters) - Walt Disney Co agreed to give Netflix exclusive TV distribution rights to its movies, becoming the first major studio to stream its movies to TV viewers via Netflix instead of distributing them to HBO, Showtime or other premium TV channels.

The agreement begins in 2016, after Disney's current deal with Liberty Media's pay-TV channel Starz expires.

The deal gives Netflix streaming rights to movies from Disney's live action and animation studios, including those from Pixar, Marvel, and the recently acquired Lucasfilms. Disney bought the famed studio founded by George Lucas and responsible for the "Star Wars" franchise for $4 billion on Oct. 30.

Movies from Steven Spielberg's DreamWorks studios are not included in the deal, as that studio distributes its movies through CBS's Showtime on TV. Disney recently signed a deal to distribute DreamWorks' films theatrically after the studio's deal with Viacom's Paramount Pictures expired.

Under the deal's terms, Netflix can stream Disney movies beginning seven to nine months after they appear in theaters, as Starz had done in Disney's prior agreement. The deal does not cover DVD rentals of Disney movies.

The agreement follows similar deals Netflix has inked with smaller studios, including Relativity Media, The Weinstein company and DreamWorks Animation.

Netflix shares were up 12.9 percent to $85.83 in afternoon trading following news of the agreement. (Reporting By Ronald Grover; Editing by Peter Lauria and Tim Dobbyn)

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