*Two-year deal for full episodes of Discovery shows
*First major release of Discovery long-form content on Web
By Paul Thomasch
NEW YORK, Sept 21 Netflix Inc (NFLX.O) and
Discovery Communications Inc (DISCA.O) have reached an
agreement to bring episodes of popular TV adventure shows
including "Man vs. Wild" and "River Monsters" to the streaming
service, according to people close to the deal.
The deal is the first major move by Discovery to make full
episodes of its TV shows available for instant streaming,
expanding well beyond the short clips that are now available on
video sites such as Google Inc's (GOOG.O) YouTube
The two-year deal covers only material from prior seasons
of the TV shows and is limited to Netflix subscribers in the
United States, according to the sources. Discovery has an
option for a third year.
Netflix officials could not be immediately reached for
Financial terms of the agreement could not be learned.
Home to some of the biggest hits on cable TV, Discovery
Communications' networks include Discovery, TLC and Animal
Planet, ID: Investigation Discovery, Science and Military
Channel. But Chief Executive David Zaslav has long shied away
from making full episodes of Discovery's shows available on the
web, saying it failed to make economic sense.
Instead, he has chosen to use the web largely as a
promotional tool to draw new viewers to its programs, while
concentrating on expanding the TV business overseas.
The deal with Netflix, however, allows Discovery to sell a
big chunk of its programming library, rather than just one or
two of its recent hits. None of the content from Oprah
Winfrey's OWN Network -- in which Discovery has a 50 percent
stake -- has been included, the sources said.
Under the deal, Netflix will also provide a search function
that makes it possible for a customer to simply enter the words
Discovery Communications into a search bar and get a list of
all the available programs from TLC, Animal Planet or the other
The agreement comes during a rough stretch for Netflix,
which needs to add more content to its streaming service to
keep drawing in new customers and fend off competition from the
likes of Amazon.com (AMZN.O), Google Inc (GOOG.O) and Apple Inc
At the same time, Netflix has been under pressure from
Hollywood studios and cable programmers to pay much more for
content. Negotiations with Liberty Media's LINTA.O Starz were
recently called off because the two sides could not reach an
agreement on pricing terms.
Earlier this week, Chief Executive Reed Hastings announced
new content would be coming soon, without naming possible
Hastings also unveiled plans to further concentrate on its
streaming service by splitting off its DVD-by-mail business,
renaming it Qwikster. The decision, however, set off another
round of complaints from customers already upset at price
increases announced over the summer.
Netflix shares finished down 9 percent at $130.03 on
Tuesday, and are down about 35 percent over the last month.
Discovery shares are up about 10 percent over the same period.
(Reporting by Paul Thomasch; Editing by Bob Burgdorfer)
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